Section 129 of the CGST Act — Goods in Transit — The Appellant filed appeal against the order dated 08.07.2019, vide which an additional demand of Rs 5,84,766/- has been created under Section 129(3). The Appellant submitted that Tax and penalty has been imposed without issue of any proper notice and also without grant of any opportunity of being heard. Granting opportunity of being heard is not mere empty formality but it is the fundamental principles of natural justice. The Authority observed that before the commencement of movement of goods the supplier had raised the tax invoice. The e-way bill was also generated prior the commencement of movement. Once the tax invoice is issued and the e-way bill generated through online GST Portal containing all details regarding the goods the information of such transaction is available with GST authorities also, therefore, the possibility of tax evasion is very remote. The court relied upon the Judgement of the Hon’ble Supreme Court in the matter of M/s. Satyam Shivam Papers Pvt. Ltd. Vs. Asst. Commissioner (ST) and 4 others dated 12 January 2022, whereby it was held that tax/penalty under section 129 cannot be imposed merely on the basis of Expiry of E-Way bill and without proving the intention to evade the tax.

Held that:- The Hon’ble Authority quashed the impugned order. However, imposed a penalty of Rs. 15,000/- under section 125 on the Appellant and directed the Respondent to recover the amount of penalty and refund the balance to the Appellant as per law.