GSTAT Bengaluru ordered refund of ₹2,17,764 collected from a job worker returning processed fabric to its principal in Maharashtra, finding the e-way bill and challan met Rules 55 and 138.

GSTAT Bengaluru has held that goods returned by a job worker to its principal under a delivery challan and an e-way bill marked for job work do not attract Section 129 merely because no IGST was charged on the inter-State movement. [Bang Poly Packs (A Division of Bang Data Forms Pvt Ltd) v. Commissioner of Commercial Taxes, Karnataka & Ors., 2026-juristway.com-3180-GSTAT(Bengaluru)-GST]

The Bench of Sudha Koka, Member (Technical), and Srikanth Venkatraman, Member (Judicial), allowed the appeal against the order dated 27 Feb 2026. Srikanth Venkatraman wrote the order.

The appellant converts PP granules received from its Solapur unit into woven fabric. A consignment of fabric, wastage and scrap sent back to Solapur on 24 Jan 2024 was detained because the goods were not capital goods and no IGST was charged, and tax of ₹1,08,882 and an equal penalty were collected under Section 129(1)(a). The first appellate authority said in one place that an inter-State supply was declared intra-State, and elsewhere that IGST was not charged.

The Bench admitted additional grounds on a pure question of law but rejected the plea that the order was void for applying Section 129(1)(a) as it stood before its amendment. The amendment only changed the amount payable for release, not the power to detain, so applying the old law was a mistake that did not make the order void.

On merits, Section 143 allows goods to move to and from a job worker without payment of tax, and the e-way bill and challan contained all particulars required by Rules 55 and 138. The absence of IGST could not show a contravention “without identifying the applicable charging provision and the nature of the alleged taxable supply.” The appellate authority’s findings were also contradictory.

The tax and penalty totalling ₹2,17,764 are to be refunded with statutory interest within eight weeks, after verification of the payment records.

2026-juristway.com-3180-GSTAT(Bengaluru)-GST