In this paper, a novel Enhanced Spatial Modulation-based Orthogonal Time Frequency Space (ESM-OTFS) is proposed to maximize the benefits of enhanced spatial modulation (ESM) and orthogonal time frequency space (OTFS) transmission. The primary objective of this novel modulation is to enhance transmission reliability, meeting the demanding requirements of high transmission rates and rapid data transfer in future wireless communication systems. The paper initially outlines the system model and specific signal processing techniques employed in ESM-OTFS. Furthermore, a novel detector based on sparse signal estimation is presented specifically for ESM-OTFS. The sparse signal estimation is performed using a fully factorized posterior approximation using Variational Bayesian Inference that leads to a low complexity solution without any matrix inversions. Simulation results indicate that ESM-OTFS surpasses traditional spatial modulation-based OTFS, and the newly introduced detection algorithm outperforms other linear detection methods.