GSTAT Quashes Tax Penalty Based Solely on Unverified Driver Statements

The Goods and Services Tax Appellate Tribunal held that penalties imposed under Section 129 of the CGST and UPGST Acts cannot be sustained exclusively on the basis of an uncorroborated statement made by a vehicle driver. If the physical goods in transit correspond precisely with the details mentioned in the accompanying tax invoice and e-way bill, verbal discrepancies from drivers hold no legal weight. Statutory tax provisions penalize actual evasion or document discrepancies rather than minor verbal misunderstandings during transit checks, ensuring that compliant businesses are not harassed by tax authorities.

The old position often exposed transporters to arbitrary detentions based on casual remarks, whereas the current ruling establishes that authentic documentation overrides oral statements. Tax professionals and logistics managers must ensure all transit vehicles carry error-free invoices and active e-way bills to counter unwarranted departmental penalties effectively. Businesses should train drivers to refer officers directly to official paperwork during inspections rather than making unverified verbal remarks.

Bottom line: Valid e-way bills and invoices protect shipments from penalties regardless of unverified driver statements.