Vardhman Yarns and Threads Limited v. Commissioner of Commercial Taxes & Ors. {GSTAT, Appeal No. APL/221/BUR/2026, Order dated 30.09.2026}
Facts:
Appellant transferred sewing threads from its unit in Perundurai, Tamil Nadu, to its Bengaluru branch under valid tax invoices and a generated Part-A of the e-way bill. However, Part-B containing the vehicle number was not updated. The goods were detained under Section 129 of the CGST/KGST Acts, and tax and penalty were imposed. The appellant subsequently updated Part-B.
Issue:
Whether detention of goods and levy of tax and penalty under Section 129 were sustainable when Part-B of the e-way bill was not updated, but the vehicle had already reached the consignee’s premises and the omission was subsequently rectified.
Held:
The GSTAT allowed the appeal and set aside the impugned Order-in-Appeal dated 27.11.2019. It held that detention and penalty under Section 129 were unsustainable because the vehicle had reached its destination, the omission was a rectifiable procedural lapse without established intent to evade tax, and the adjudication order was backdated despite a subsequent personal hearing. The Department was directed to refund the tax and penalty collected under protest, along with applicable statutory interest, within four weeks.
