The Tribunal held that the department failed to establish contravention by cogent evidence, noting that the vehicle was intercepted outside the gate, no unloading occurred, and the penalty rested on assumption rather than proof.
The GSTAT Lucknow Bench has set aside a penalty of ₹7,20,674 imposed under Section 129(3) on M/s Chemenergy Biofuels Limited, whose vehicle carrying refined glycerine was intercepted near a factory in Kanpur Dehat while accompanied by valid tax invoice and e-way bill. [Chemenergy Biofuels Limited v. Shrawan Kumar Mishra, Assistant Commissioner, Kanpur State & Ors.]
Members Santosh Kumar Srivastava (Judicial) and Arvind Kumar (Technical) found that the vehicle was intercepted outside the gate, no unloading had occurred, and the allegation of diversion was based on assumptions and the driver's statement — which was recorded without being supplied to the appellant, undermining the fairness of the adverse finding. The transaction was explained as a lawful sale-in-transit with a fresh invoice and e-way bill.
This is the second order from the Lucknow Bench in recent weeks setting aside a Section 129 penalty on similar facts, reinforcing the principle that route deviation with valid documents is not a statutory contravention under the GST Act.
2026-juristway.com-3055-GSTAT(Lucknow)-GST
