The Tribunal held that issuing an adverse order within 57 minutes without evaluating the taxpayer's explanation violates the mandatory requirement of opportunity of hearing under Section 75(4), and that demanding tax under Section 129 when the same transaction has already suffered tax amounts to double taxation prohibited by the Constitution.
The Goods and Services Tax Appellate Tribunal, Allahabad Bench, has quashed a penalty of ₹1,77,248 levied under Section 129 of the CGST Act on an authorised automobile dealer who transported six motorcycles with a valid e-invoice but without an e-way bill, holding that the penalty order was a jurisdictional nullity on two independent grounds [Saraswati Motors v. Mohammad Yahiya Ansari, Additional Commissioner Grade 2 Appeal, Prayagraj and Others].
The appellant, an authorised Hero MotoCorp dealer, despatched six motorcycles valued at ₹4,05,138 to another dealer on 23 November 2021. The consignment was accompanied by a valid e-invoice carrying an Invoice Reference Number, QR code, and individual engine and chassis numbers for each motorcycle — ensuring complete traceability of the goods. However, an e-way bill had not been generated, reportedly due to COVID-19 related disruptions. Upon interception, the show cause notice in Form MOV-07 and the penalty order in Form MOV-09 were both issued within 57 minutes, without granting any opportunity to the appellant to respond or explain the circumstances.
The Bench of Mahtab Ahmad (Judicial Member) and Ashish Varma (Technical Member) quashed the penalty on two independent grounds. First, the Tribunal held that issuing an adverse order within 57 minutes of the show cause notice — without any intervening opportunity for the taxpayer to respond, evaluate the explanation offered, or present evidence — constitutes a violation of the mandatory hearing requirement under Section 75(4) and renders the order a jurisdictional nullity. The time gap between the notice and the order was so insignificant as to make any pretence of hearing illusory. The Tribunal relied on the Allahabad High Court's decisions in Falguni Steels v. State of U.P. (2024) and Shyam Sel and Power Ltd. v. State of U.P. (2023) in support of this position.
Second, the Tribunal addressed the substantive question of double taxation. The goods were accompanied by a valid e-invoice on which tax had already been charged and paid. Demanding tax again under Section 129 for the same consignment, merely because the e-way bill was not generated, amounted to unconstitutional double taxation — the State cannot collect tax twice on the same transaction. The Tribunal drew a clear distinction between the substantive tax obligation (which had been fulfilled) and the procedural documentation requirement (the e-way bill), holding that the breach of the latter is a matter for Section 122 or Section 125, not Section 129. Accordingly, the penalty was quashed and liberty was granted to the Department to proceed under the appropriate penal provisions for the procedural lapse.
2026-juristway.com-2859-GSTAT(Allahabad)-GST | GSTAT Allahabad | APL/6/ALB/2026 | 09.10.2026
