Decided 30 September 2026. The Bengaluru Bench of GSTAT has quashed a penalty of Rs 20,13,640 under section 129 imposed because fully duty-paid imported goods were taken back to the customs agent's warehouse without a fresh e-way bill, after the vehicle missed its delivery slot at Amazon. Following the Karnataka High Court in Kristna Engineering Works, the Tribunal substituted a general penalty of Rs 25,000 under section 125.
Case at a glance
| Case | Valuecart Private Limited v. Commercial Tax Officer (Enf-05, South Zone), Bengaluru |
| Forum | GSTAT, Bengaluru Bench, Division Bench Court II |
| Appeal No. | APL/174/BUR/2026 |
| Date of order | 30 September 2026 |
| Penalty quashed | Rs 20,13,640 under section 129 (200%) |
| Result | General penalty of Rs 25,000 under section 125; refund of deposit and release of bank guarantee |
Facts of the case
The appellant imported printers, cameras and cartridges from South Korea, paid customs duty and IGST, and stored them at its customs agent's facility at Bangalore International Airport.
On 24.03.2022 the goods left with a valid e-way bill for an Amazon fulfilment centre, but traffic made the vehicle miss its slot and Amazon refused entry. The goods were driven back to the warehouse without a return e-way bill or delivery challan, and were intercepted. Physical verification found no discrepancy. Penalty was imposed on 17.04.2022 and upheld in appeal on 06.03.2023.
Issue before the Tribunal
Does returning duty-paid goods to the warehouse without a fresh e-way bill, after an aborted delivery, justify a 200% penalty under section 129?
What the Tribunal held
- The goods were fully duty-paid imports backed by bills of entry, invoices and Amazon's slot cancellation. Movement back to the warehouse was an involuntary fallback, not a clandestine sale.
- Following Satyam Shivam Papers (SC), intent to evade tax is essential for section 129 penalties. Orson Holdings (Gujarat HC), Nezone Tubes (Jharkhand HC) and Medha Servo Drives (Calcutta HC) support this. Gati Kintetsu was distinguished.
- Bound by the Karnataka High Court in Kristna Engineering Works, the Tribunal set aside the section 129 penalty and imposed a general penalty of Rs 25,000 under section 125 for the technical omission.
- The 25% deposit of Rs 5,03,410 is to be refunded and the bank guarantee released after adjusting Rs 25,000, within eight weeks.
Practical takeaways for taxpayers
- If a delivery is aborted and goods must return, generate a fresh e-way bill or delivery challan for the return trip.
- Where the lapse is purely procedural and tax is fully paid, argue for a section 125 general penalty instead of section 129.
- Keep slot booking and cancellation records from marketplaces as evidence of the reason for movement.
Frequently asked questions
Is a fresh e-way bill needed when goods return after failed delivery?
Yes, compliance requires it, but GSTAT held that failing to do so without intent to evade attracts only a nominal general penalty.
What penalty was finally imposed?
A general penalty of Rs 25,000 under section 125, in place of Rs 20,13,640 under section 129.
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This summary is based on the order of the GST Appellate Tribunal, Bengaluru Bench (Division Bench Court II) in Appeal No. APL/174/BUR/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.