GSTAT: Longer Route for Safety due to Difficult Terrain cannot Trigger GST Penalty without evidence of Tax Evasion

GSTAT Varanasi held that mere diversion from a shorter route and travel through another State cannot justify detention and penalty u/s 129 of CGST Act, 2017, when the goods are accompanied by valid documents and there is no evidence of tax evasion. The Tribunal noted that the GST law does not require a specific transportation route to be declared and accepted the appellant’s explanation that the longer route was chosen to avoid difficult hilly terrain and ensure safe movement of the heavy commercial vehicle. Since the Revenue failed to establish any intended destination in Uttar Pradesh or any material indicating an intention to evade tax, the penalty of ₹6,48,366 was held unsustainable. Accordingly, the orders imposing and upholding the penalty were quashed, and refund of the penalty deposited under protest was directed.