No idea what your GS lied about or even why he lied, so difficult to say much .
However, no point in trying o discipline a child if the child will just ignore what he did in the first place and carry on doing it. Maybe, without your knowledge, it is not the first time , other things have been tried and failed and he won't forget this in a hurry!
Keep out of the argument and next time you see your GS, you must back his parents up with quietly reinforcing that he was wrong to tell a lie(s). Do not, whatever you do, pat him on the head and let him get away with it or you are on the path to destruction of any relationship with his father.
I am also confused about how he seems to be shuttled between the two homes.