Section 129 Penalty Set Aside for Non-Generation of E-Invoice Before Transport Where Tax Invoice, E-Way Bill and LR Were Available and E-Invoice Was Subsequently Generated — GSTAT Lucknow Follows Allahabad HC’s Nancy Trading Company

The GSTAT Lucknow Bench has set aside a Section 129 penalty of Rs. 63,72,000 (200% of IGST) imposed on a machinery manufacturer for transporting goods (4 FFS Machines valued at Rs. 2.08 crores) from Maharashtra to UP without having generated the e-invoice under Rule 48(4) before commencement of transportation, holding that the initial e-invoicing lapse was a procedural/technical lapse and that in the peculiar circumstances — where the tax invoice, E-Way Bill and LR were all available and the e-invoice was subsequently generated with a specific IRN within 5 days — no intention to evade tax was established. The ruling by Members Santosh Kumar Srivastava (JM) and Arvind Kumar (TM) in APL/98/LCK/2026 (VLM Group, decided 28.09.2026) follows the Allahabad HC’s Nancy Trading Company and Division Bench decision in Kumar Cargo Solution, and relies on the SC’s Hindustan Steel Ltd. v. State of Odisha on judicial exercise of discretion in penalty proceedings.

The Tribunal drew a careful distinction between substantive violations (mismatch of goods, fictitious invoices, undervaluation, invalid E-Way Bill) and procedural/technical violations (absence of e-invoice where all other transport documents existed and the underlying transaction was genuine and fully traceable). The Department’s contention that subsequent generation could not retrospectively validate the transportation was noted but held to be relevant only for determining whether the case involved deliberate suppression or merely a compliance failure.

- 2026-juristway.com-2717-GSTAT(Lucknow)-GST  |  GSTAT Lucknow Bench  |  APL/98/LCK/2026  |  28.09.2026