The GST Appellate Tribunal, Chandigarh set aside a ₹36,93,185 demand on a job worker based on DGARM e-way bill data, finding the bills covered principals’ goods moving for job work, not supplies.
Tax cannot be demanded under Section 73 of the CGST Act merely on the value of goods shown in e-way bills when there is no other evidence of supply or evasion [Mittal Cutters & Allied Works (P) Ltd. v. Commissioner (Appeals), CGST Appeals Commissionerate, Chandigarh & Ors., 2026-juristway.com-3202-GSTAT(Chandigarh)-GST].
The appeal was heard by Jatinder Pal Singh, Member (Judicial), and Pradeep Kumar Goel, Member (Technical). At the outset, the Tribunal noted that under Rule 33(1) of the GSTAT (Procedure) Rules, 2025, the Commissioner concerned, here the Commissioner of CGST, Chandigarh, should be shown as respondent, and directed correction of the cause title.
For FY 2020-21, the appellant’s GSTR‑3B showed tax of ₹1,10,069, while e-way bills on the portal pointed to ₹38,03,254. On the basis of a DGARM report, IGST of ₹36,93,185 was confirmed under Section 73 with interest and a penalty of ₹3,69,319.
The appellate authority upheld the demand. It reasoned that a registered job worker must generate its own e-way bills, so the 24 bills showing the appellant as consignor must have been its own outward supplies.
The appellant, which cuts HR sheets on job work, traced one sample transaction in full. Shankar Cylinders Pvt. Ltd. sent an HR coil worth ₹13,48,370 under a delivery challan marked for job work only and not for sale, and generated an e-way bill for “Outward – Job Work”. The appellant invoiced job charges of ₹16,842, including IGST of ₹2,569. The principal then generated a return e-way bill for “Inward – Job Work Returns” at the same value.
The appellant also showed that for FY 2021-22, the department had accepted an identical explanation and closed proceedings by an order in ASMT‑12 dated 29 Aug 2025.
The Tribunal held that the appellate authority was wrong to say only a registered job worker could generate the e-way bill. Under Rule 138, the bill is generated by the registered person who “causes movement of goods”, which may be the principal or the job worker. In any case, who generated it hardly mattered so long as consignor and consignee details were correct.
On merits, the SCN contained no evidence that the appellant had supplied the goods, clandestinely or otherwise. It rested only on the DGARM report of a value difference and alleged no wrongdoing, while the appellant’s documents established the job-work trail.
“We therefore hold that in the absence of any other evidence which clearly establishes evasion / non-payment of tax, there is no legal basis for demanding duty merely on the basis of the value of goods declared in the e-way bills.”
GSTAT Chandigarh, Mittal Cutters & Allied Works (P) Ltd. v. Commissioner (Appeals), CGST Appeals Commissionerate, Chandigarh & Ors.
The appeal was allowed, and the demand of tax, interest and penalty was set aside.
2026-juristway.com-3202-GSTAT(Chandigarh)-GST
