Ankit Traders Vs Commissioner State Tax & Ors. (GSTAT Varanasi)
Summary: The GST Appellate Tribunal, Varanasi, allowed the appeal of Ankit Traders and set aside a penalty of ₹1,60,216 imposed under Section 129 of the CGST/SGST Acts, read with Section 20 of the IGST Act. The dispute arose after a vehicle carrying two consignments of areca nuts was intercepted at Chandauli on 3 February 2024. Although the driver produced e-invoices and e-way bills, the authorities treated the difference between the Assam dispatch location in the e-way bills and Kolkata in the transporter’s goods receipts as a violation warranting penalty.
The appellant explained that the goods had first moved by rail from Assam to Kolkata and were then transported by road from Kolkata to Kanpur. The Kolkata-based road transporter accordingly recorded Kolkata as the dispatch point in its goods receipts. The appellant argued that the discrepancy was technical, that the goods were supported by valid documents, and that there was no intention to evade tax. The State contended that an intention to evade tax was not an essential ingredient for imposing penalty under Section 129.
The Tribunal examined the accompanying documents and statutory returns and found that both consignments were duly accounted for and the applicable tax had been paid. It accepted the explanation for the two-stage transportation and found no material establishing unaccounted goods or tax evasion. Referring to decisions of the Madras and Allahabad High Courts on technical discrepancies in e-way bills and invoices, the Tribunal concluded that a minor procedural mismatch in these circumstances could not sustain the penalty.
Accordingly, the Tribunal quashed the adjudication order dated 5 February 2024 and the first appellate order identified in the operative portion as dated 25 October 2025. It directed that any penalty already paid be refunded in accordance with law, with each party bearing its own costs.
Cases Discussed:
- M/s K.S. Traders Vs The Deputy Commercial Tax Officer (INT) Roving Squad — Madras High Court; W.P. (MD) No. 23310 of 2025
- M/s Jindal Pipes Ltd. Vs Deputy State Tax Officer (INT) Roving Squad-I, Madurai — Madras High Court; W.P. (MD) No. 17211 of 2024; order dated 25 July 2024
- M/s Saumya Vs Union of India — Allahabad High Court; Writ Tax No. 664 of 2025; decided 14 July 2025
- M/s Sangeeta Jain Vs Union of India and Others — Allahabad High Court; Writ Tax No. 783 of 2023; 2024:AHC:70303; decided 22 April 2024
FULL TEXT OF THE ORDER OF GSTAT VARANASI
Assistant Commissioner, Mobile Squad IInd Unit, Chandauli, Uttar Pradesh intercepted the vehicle no. WB 23 F 6170 loaded with areca nuts on 03.02.2024 within geographical area of district Chandauli (Uttar Pradesh). The intercepted vehicle and goods loaded with it were inspected and searched by tax authorities. The driver of the vehicle produced the following documents at the time of interception:
(i). GR Number 12480 dated 29.01.2024 of M/s CKT Cargo Movers, Kolkata
(ii). E-invoice No. SR/23-24/718 dated 27.01.2024 issued by M/s SR Enterprise, Purbo Kitterbond Pt. II, Assam (GSTIN: 18BRDPC7186A1ZO)
(iii). E-way Bill No. 821380478184 dated 02.02.2024 regarding transportation of seventy bags of areca nut from Assam to M/s ANKIT TRADERS, KANPUR.
(iv). GR Number 12523 dated 30.01.2024 of M/s CKT Cargo Movers, Kolkata
(v). E-invoice No. SR/23-24/723 dated 30.01.2024 issued by M/s SR Enterprise, Purbo Kitterbond Pt. II, Assam (GSTIN: 18BRDPC7186A1ZO)
(vi). E-way Bill No. 851381243803 dated 02.02.2024 regarding transportation of 110 bags of areca nut from Assam to M/s ANKIT TRADERS, KANPUR.
2. According to version of tax authorities, the vehicle and goods were seized on the basis of the statement / narration of driver and the bilty of the transporter regarding transportation of goods from Kolkata instead of Purbo Kitterbond, Assam which mismatched with place of dispatch as mentioned in E-way Bill. The place of dispatch had been mentioned in E-way Bill as Purbo Kitterbond, Assam and place of supply as Kanpur, Uttar Pradesh. Allegedly supply had been made by M/s SR Enterprises,Assam to M/s Ankit Traders, Kanpur.
3. The recipient M/s Ankit Traders submitted reply to Mobile Squad Officer / Adjudicating Authority after receiving Show Cause Notice (SCN) regarding mismatch of the place of dispatch. The recipient expressed the alleged mismatch as minor discrepancy, since the goods were transported with lawful documents, i.e. E-way Bill and E-invoice, etc. and no intention depicts to evade the tax.
4. Disbelieving averments made in reply to show cause notice, the Adjudicating Authority imposed penalty of Rs. 160216/- under section 129 of CGST / SGST Act / section 20 of IGST Act recognizing the act of supplier and recipient as breach of law and rules prescribed thereunder vide order dated 05.02.2024.
5. Being aggrieved vide order dated 05.02.2024 passed by the Mobile Squad Officer, the appeal was preferred under section 107 of GST Act and same got dismissed vide order dated 25.10.2025. The Appellate Authority confirmed the order dated 05.02.2024 passed by Adjudicating Authority.
6. The instant appeal has been filed by appellant M/s Ankit Traders to redress the grievance arisen due to orders dated 05.02.2024 and 25.10.2025 passed by the Adjudicating Authority and First Appellate Authority respectively. Such orders have been challenged mainly on the grounds that the Adjudicating Authority as well as Appellate Authority both failedto consider that the discrepancy regarding mismatch in place of dispatch was of minor nature, statement of driver can not be relied upon and non-existence of intention to evade the tax.
7. The copy of E-invoices, E-way Bill, copy of impugned orders and other relevant documents have been uploaded on the portal by appellant alongwith filing of appeal before the Tribunal.
8. In his written submissions, the appellant submitted that the goods had actually been dispatched by rail from the supplier’s location at Purbo Kitterbond, Assam, through the nearest railway station at Monacherra to Kolkata, and thereafter transported by road from Kolkata to Kanpur. Since M/s CKT Cargo Movers, Kolkata, was responsible for the road transportation of the goods from Kolkata to Kanpur, the transporter issued the goods receipt (GR) mentioning Kolkata as the place of dispatch. Accordingly, the driver made his statement on the basis of the road transportation documents, wherein Kolkata was mentioned as the place of dispatch.
9. The learned counsel of appellant Dr. Swayambhav Manu, Advocate, appeared through virtual mode and learned representative of respondent State, Shri Manav Kumar Vikas, Deputy Commissioner, State Tax, appeared in person foradvancing oral arguments.
10. Heard argumentsof learned counsel of appellant and learned representative of respondent. The Bench also perused the record available on portal.
11. It is an admitted fact that the recipient, M/s Ankit Traders, is based in Kanpur, Uttar Pradesh, and the tax in respect of the transactions in question accrued to the State of Uttar Pradesh. Further, the documents produced at the time of interception, read in conjunction with the corresponding returns filed by the supplier and the recipient, establish that both consignments were duly accounted for and the applicable tax had been duly discharged by the concerned parties. In view of these facts, there is no basis to allege any intention to evade tax, particularly when the transactions were duly recorded in the statutory returns and the tax liability stood duly paid.
12. On the basis of grounds of appeal and submission made on behalf of both parties, the determinable point exists as: whether merely the mismatch in place of dispatch without intention to evade tax leads violation or breach of law and rules attracting imposition of penalty under section 129 of GST Act.
13. The Adjudicating Authority considered the mismatch in place of dispatch as breach or violation of law and rules.On such basis the penalty was imposed under section 129 of GST Act. The order passed by Adjudicating Authority finds confirmation vide impugned order dated 31.10.2025 passed by Appellate Authority.
14. The learned counsel of appellant argued that the penalty does not attract to be imposed under section 129 of GST Act merely on the basis of mismatch in place of dispatch, particularly where no intention exists to evade the tax.
15. The learned State Representative appearing for respondent argued that the intention to evade tax is not a key ingredient for imposition of penalty under section 129 of GST Act.
16. The learned counsel of appellant and learned representative of State Tax Department relied upon various case laws. The relevant case laws will find mention in succeeding paragraphs.
17. In M/s K.S. Traders vs. The Deputy Commercial Tax officer (INT) Roving Squad, W.P. (MD) No. 23310 of 2025, there was a mismatch between the place of supply indicated in the tax invoice and place of dispatch mentioned in the E-way Bill, the consignment was intercepted and seized by Tax Authorities. Hon’ble Madras High Court pleased to decide the case relying upon earlier decision of same Hon’ble Court in M/s Jindal Pipes Ltd vs Deputy State Tax Officer (INT) Roving Squad-I, Madurai, 2021 (8) TMI 72, rendered on 25.07.2024 in W.P. (MD) NO. 17211 of 2024. Onthe ratio of law laid in M/s Jindal Pipes (supra), Hon’ble Court set aside the order passed by tax authorities regarding imposition of penalty treating the mismatch of place of supply as technical venial breach of the place of supply as technical venial breach of the provisions or the minor discrepancy in the variance in the address in the tax invoice and the E-way Bill.
18. In para 19 of the judgment rendered in M/s Jindal Pipes Ltd. (supra), Hon’ble Court observed, “In my view, the imposition of penalty for technical venial breach of the provisions or the minor discrepancy in the variance in the address in the tax invoices and the E-way Bill would not justify the penalty under section 129 (5) of the respective GST enactments.’’
19. Hon’ble Allahabad High Court in the case of M/s Saumya vs. Union of India, Writ Tax No. 664 of 2025, decided on 14.07.2025, held that a mere technical error in the dispatch location mentioned in the E-way Bill, in the absence of any intent to evade tax or discrepancy in goods does not warrant seizure or imposition of penalty under section 129 of the CGST/SGST Act.
20. In M/s Sangeeta Jain vs. Union of India and others (Writ Tax No. 783 of 2023, decided on 22.04.2024), 2024:AHC:70303, Hon’ble Allahabad High Court ruled that minor clerical ortechnical errors in an E-way Bill or invoice, without any proof of mens rea to evade tax does not attract section 129 of CGST / SGST Act for seizure and imposition of penalty.
21. The law laid in M/s Saumya (supra) and M/s Sangeeta (supra) underscores the principal that procedural lapses without substantive irregularities should not lead to punitive consequences. M/s SK Traders (supra) and M/s Jindal Pipes Ltd (supra) also evolve same principle.
22. On the basis of observations made above, the appeal is liable to be allowed, since at the time of interception valid documents ie. E- invoices and E-way Bills were produced. Both the transactions are reflected in the GSTR-2A and no mens rea (guilty intention) exists to evade the tax and law does not support to penalize the traders under section 129 of CGST / SGST Act merely on the basis of technical irregularities.
23. The appeal is allowed and impugned orders dated 05.02.2024, and 25.10.2025 passed by Adjudicating Authority and Appellate Authority respectively are hereby quashed. The amount of penalty as imposed upon appellant, if paid, be refunded by respondent in accordance to procedure and law. The parties to bear their own respective costs.
Order pronounced in open court. Dated: 28.10.2026.
