The Jharkhand High Court, in a significant ruling on Goods and Services Tax (GST) law, has dismissed a writ petition filed by M/s. Pratik Enterprises challenging a penalty imposed under Section 129(3) of the CGST Act, 2017. A Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Sujit Narayan Prasad held that a discrepancy between the loading point mentioned in the E-Way Bill and the actual loading point, corroborated by GPS data and the driver’s statement, constituted a violation of Rule 138 of the CGST Rules, 2017, justifying the penalty. The court dismissed the petition as an “afterthought” and “devoid of any merit.”
Background of the Case
The case originated on March 9, 2025, when GST authorities inspected a vehicle transporting goods belonging to the petitioner, M/s. Pratik Enterprises. The inspection, conducted under Section 68 and Section 129 of the CGST Act, 2017, revealed several discrepancies.
According to the respondents—the Principal Commissioner, Assistant Commissioner, and Superintendent of CGST and Central Excise, Hazaribagh—the loading point of the goods was found to be different from the location declared in the accompanying E-Way Bill. This was confirmed by the statement of the driver and the GPS location shared by the transporter.
The authorities further stated that intelligence suggested a specific modus operandi by the petitioner, who was primarily in the business of Pet Bottle Scrap. It was alleged that the petitioner would purchase scrap from local, unregistered persons, store it at 27 undeclared additional places of business, and then supply it to various purchasers from those locations. The department also raised concerns about the petitioner availing significant Input Tax Credit (ITC) amounting to Rs. 1.01 Crore in the financial year 2023-2024 and Rs. 1.03 Crore in 2024-2025, which appeared to be based on fake invoices from suppliers whose GST registrations were suspended or cancelled.
Following the inspection and these findings, the goods and the conveyance were detained, and a notice in FORM GST MOV-07 was issued on March 12, 2025. Subsequently, an order dated March 17, 2025, was passed in GST MOV-09, levying a penalty of Rs. 3,43,075/-.
Arguments of the Parties
The petitioner, represented by Advocate Arup Dasgupta, challenged the penalty order, seeking it to be quashed and the penalty amount refunded with interest. The primary contention was that there was no intent to evade tax and that all requisite documents for the conveyance of goods were available.
In its reply to the authorities and its submission before the court, the petitioner argued that before the movement of goods from its warehouse in Kharagpur, West Bengal, a valid e-Tax Invoice and an E-Way Bill had been generated from the GST portal. The driver was carrying the e-Invoice, the E-Way Bill, a consignment note, and a weighment slip. The petitioner asserted that since these documents were in place, there was no violation of Rule 138 of the CGST Rules, 2017, and therefore, the provisions for levying a penalty under Section 129 of the CGST Act could not be invoked.
The respondent GST authorities, represented by Advocate Yashdeep Kanhai, maintained that the violation was clear and demonstrable. They presented evidence that the actual loading point was different from the one declared, which was a direct contravention of the rules governing the movement of goods.
Court’s Analysis and Decision
The High Court meticulously examined the facts and arguments presented. The bench acknowledged that the petitioner had generated an e-Invoice and an E-Way Bill. However, it found the evidence presented by the GST authorities to be compelling.
The judgment noted, “the loading point of the goods located in the said vehicle has been found to be different from the one declared in the E-Way Bill and the same has been corroborated by the statement of the driver as well as the GPS location shared by the transporter/driver.”
The court detailed the specific evidence: “The actual loading point of the said goods has been found to be Rupnarayanpur, West Medinipur, West Bengal as per the GPS location shared by the transporter/driver which is different from the place of dispatch mentioned in E-Way Bill i.e. Village-Sakui, Post:- Matkatpur, Kharagpur, District:-Pashim Medinipur, West Bengal.”
Furthermore, the court observed that GPS data showed the vehicle remained stationary for about six hours at Rupnarayanpur on March 8, 2025, “which confirms the goods were loaded at this location which is different as per E-Way Bill resulting in violation of Rule 138 of GST Rules, 2017.”
The bench also took into account that the petitioner had paid the penalty amount without protest to secure the release of the goods and conveyance. While clarifying that such payment does not automatically waive a petitioner’s rights, the court concluded that the challenge was not sustainable given the strong evidence. The judgment stated, “…given the fact that the adjudicating authority was adequately armed with material adverse to the petitioner, we have no doubt in our mind that the instant petition is clearly an afterthought besides being devoid of any merit.”
Concluding its analysis, the court found no reason to interfere with the penalty order. “Accordingly, for the reasons stated above, we find no merit in this petition and the same is dismissed, in limine,” the bench ordered.
