Abdul Hai Vs Dhananjay Kumar (GSTAT Lucknow)
Summary: The GST Appellate Tribunal, State Bench Lucknow, allowed the second appeal of Abdul Hai, carrying on business as M/s A H Traders, against a ₹1,07,730 penalty imposed under Section 129(3) of the CGST/UPGST Act, 2017, read with Section 20 of the IGST Act, 2017. The dispute arose when vehicle No. UP65H9147 was intercepted on 18 August 2025 while transporting 3,990 kg of arecanuts, bearing HSN Code 080280, from M/s Baba Mahakal Enterprises, West Bengal, to the appellant in Lucknow. The consignment was accompanied by tax invoice No. BME/86/2025-26 dated 13 August 2025, transport documents and e-way bill particulars.
The proper officer noticed discrepancies between the address and particulars appearing in the accompanying documents and the appellant’s registered principal place of business. Following detention and notice, a penalty order was passed on 19 August 2025. The Additional Commissioner, Grade-II (Appeal), State Tax, Kanpur, upheld the penalty by an order dated 26 November 2025. Before GSTAT, the appellant maintained that the transaction was genuine and supported by valid documents, and that address discrepancies did not establish deliberate contravention or an intention to evade tax. The department defended the orders, arguing that the appellant had not established that the discrepancies were merely procedural or clerical. The Tribunal found that the department had failed to produce sufficient independent, cogent and reliable evidence establishing deliberate transportation in contravention of the Act with an intention to evade tax. A discrepancy in an address or other particulars could not, without adequate supporting evidence, automatically constitute conclusive proof of tax evasion. It also noted that no discrepancies had been found in the quantity and quality of the goods and that the First Appellate Authority had not adequately explained how the documentary differences justified the penalty. Treating the discrepancy as technical or procedural, the Tribunal relied upon M/s Hawkins Cookers Limited vs. State of U.P. and Others,
Writ Tax No. 739 of 2020, decided by the Allahabad High Court on 12 February 2024, as cited in the supplied order. It held that Section 129 proceedings could not rest merely on assumptions or unsubstantiated technical allegations. The appeal was allowed and the Order-in-Appeal dated 26 November 2025 was set aside. If any amount had already been deposited, the Tribunal directed that it be dealt with in accordance with law, subject to verification of payment records and compliance with the applicable statutory procedure.
Cases Discussed
- M/s Hawkins Cookers Limited vs. State of U.P. and Others — Allahabad High Court, Writ Tax No. 739 of 2020, decided on 12 February 2024: Relied upon by the Tribunal for the principle that a technical address error in documents accompanying goods does not justify a harsh penalty where an intention to evade tax is absent. The Tribunal reproduced the High Court’s observations concerning incorrect addresses in four out of eight e-way bills, despite correct destination addresses in invoices and bilty documents.
