Penalty for Mismatch Between E-Way Bill & Delivery Challan Upheld as It Indicates Intention to Conceal Actual Recipient of Goods

Case Details: Mohammad Shamasher vs. State of West Bengal - [2025] 171 taxmann.com 406 (Calcutta)

Judiciary and Counsel Details

• Joymalya Bagchi & Gaurang Kanth, JJ.
• Sandip Choraria, Rajeev Parik & Ms Pratusha Dutta Chowdhury, Advs. for the Appellant.
• Subir Kr. Saha, Ld. AGP & Ms Rima Sarkar, Adv. for the Respondent.

Facts of the Case

The assessee was engaged in the transportation of a JCB machine from one state to another when the vehicle carrying the machine was intercepted by the Bureau of Investigation. During the inspection, the driver failed to produce the original or duplicate copy of the tax invoice, delivery challan, or e-way bill as required under GST law. Upon verification using the E-Way Officer App, it was found that an e-way bill had been generated for the transportation. However, during physical verification, a delivery challan was submitted, which contained material discrepancies and lacked the prescribed particulars under Rule 55 of the CGST Rules, including the required signature of the consignor or its authorized representative. The adjudicating authority imposed a penalty equivalent to 200% of the tax payable under Section 129(3) of the CGST Act, 2017. The penalty order was upheld by the appellate authority. Aggrieved by the decision, the assessee challenged the penalty before the Calcutta High Court, contending that the penalty was imposed solely due to the non-production of the delivery challan and did not indicate any intent to evade tax.

High Court Held

The Hon’ble Calcutta High Court held that the mismatch between the e-way bill and the delivery challan was not an inadvertent discrepancy but a deliberate attempt to conceal the identity of the actual recipient of the inward supply. As per the e-way bill, the consignor was an unregistered person, whereas the delivery challan was accompanied by a release letter issued by a registered entity. The Court observed that this discrepancy provided an opportunity to evade tax by misrepresenting the actual recipient of the rental/lease service of the JCB machine. Furthermore, the availability of e-way bill footprints to tax authorities indicated that the declaration of an unregistered person as the consignor was intentional, aimed at avoiding GST liability. Accordingly, the Court upheld the penalty under Section 129(3) of the GST Act and dismissed the appeal.