GSTAT Split Verdict: Applicability of Section 129 Penalty for Complete Vehicle Number Mismatch in E-Way Bill Referred to Vice President

The Goods and Services Tax Appellate Tribunal (GSTAT), Uttar Pradesh, recently encountered a significant divergence of opinion between its Judicial and Technical Members regarding the imposition of penalties for e-way bill discrepancies. In the matter of Amit Tyagi Vs Tata Play Limited (GSTAT), the core issue revolved around whether entering a completely different vehicle registration number in Part-B of an e-way bill constitutes a deliberate attempt to evade tax, thereby attracting a penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) and the UP Goods and Services Tax Act, 2017 (UPGST Act).

Due to the contrasting viewpoints on the interpretation of statutory compliance and the necessity of mens rea (intent to evade tax), the matter has been escalated to the Hon'ble Vice President of the GSTAT, Uttar Pradesh, under Section 109(9) of the Central Goods and Services Tax Act, 2017.

Factual Matrix of the Dispute

As per the facts documented in the order, a transport truck bearing registration number DL-01MB-3570 was intercepted by a mobile squad led by the Assistant Commissioner of State Tax, Fatehgarh (Farrukhabad). The interception took place at the Naviganj toll plaza in the Mainpuri District on 25.03.2025 at approximately 03:51 A.M. The vehicle was transporting electrical equipment from New Delhi to a godown in Lucknow.

Upon being halted, the driver presented the necessary transit documents, which included two e-invoices and their corresponding e-way bills. The goods were being dispatched by M/s Tata Play Limited (New Delhi) to its own inter-state branch located on Bijnor Road, Lucknow.

During the physical verification of the documents, the mobile squad officer discovered a critical discrepancy. While the goods were physically loaded and transported in the truck registered as DL-01MB-3570, one of the accompanying e-way bills (No. 741512183264) displayed a completely different vehicle registration number: DL-01LAL-7401.

The detaining officer concluded that the mismatch rendered the e-way bill invalid for the movement of goods, signifying a direct violation of Section 129 read with Section 68 of the CGST/UPGST Act and Rule 138 of the CGST Rules, 2017. Consequently, a show-cause notice was issued, culminating in an adjudication order dated 01.04.2025, which imposed a penalty amounting to Rs. 10,10,186/-. The assessee remitted the penalty amount under protest to secure the release of the detained conveyance and goods.

The First Appellate Authority's Intervention

Aggrieved by the adjudicating officer's penalty order, the assessee filed an appeal before the Additional Commissioner Grade-II (Appeal), State Tax, Etawah. The assessee contended that the discrepancy was a bona fide clerical error. They emphasized that all other statutory parameters—such as the description of goods, quantity, value, and tax payment details—were perfectly aligned with the physical consignment.