Driver’s Uncorroborated Statement on Loading Point Cannot Sustain Section 129 Penalty: GSTAT Lucknow

The GST Appellate Tribunal’s Lucknow Bench dismissed a departmental appeal over iron scrap allegedly loaded from an undeclared warehouse, as no inquiry was made at the site and the documents matched the goods.

The GST Appellate Tribunal, Lucknow, has held that a penalty under Section 129(3) of the UPGST/CGST Act, 2017 cannot rest solely on a driver’s roadside statement that goods were loaded at an undeclared place of business, when the goods match a valid tax invoice and e-way bill and the Department made no inquiry at the alleged site. The Bench of Santosh Kumar Srivastava, Member (Judicial), and Arvind Kumar, Member (Technical), dismissed the Department’s appeal [Shyam Vir Singh v. A.A Enterprises, 2026-juristway.com-3254-GSTAT(Lucknow)-GST].

A vehicle carrying 16,170 kg of iron scrap was intercepted in Lucknow on 17 May 2024 with a tax invoice, e-way bill and bilty showing the respondent’s registered premises as the place of dispatch. The driver stated that the goods had been loaded at a warehouse in Chinhat on the transporter’s instructions, and as no such place was registered, a penalty of ₹2,27,160 was imposed. The first appellate authority set it aside.

The Bench first overruled the objection that the appeal fell below the monetary limit in Circular No. 207/01/2024-GST, holding that the issue was recurring and fell within the exclusions in paragraph 4. On merits, the Department argued that loading from an undeclared place stripped the documents of validity under Section 31 and Rule 46, and that mens rea is not required for a civil penalty.

The Bench found that the physical verification in FORM GST MOV‑04 recorded no discrepancy in description, quantity, weight or value. It held that a driver’s statement can start an investigation but cannot replace adjudication or override matching invoices and a live e-way bill, particularly where the taxpayer had no opportunity to cross-examine. Circular No. 61/35/2018-GST, it said, applies only where an undeclared dispatch facility is independently established through field verification.

Citing State of Kerala v. M.M. Mathew (1978), the Bench held that suspicion cannot take the place of legal proof, and that a mismatch in the loading point cannot be stretched into an intent to evade tax. The order-in-appeal dated 4 Jul 2024 was upheld, and the penalty order of 18 May 2024 stands set aside.

2026-juristway.com-3254-GSTAT(Lucknow)-GST