E-way Bill default is one of the most common type of case for high courts. In many cases the courts have emphasised that the penalty should only be levied if there is an intention to evade tax by the taxpayer. Here I would like to share the 7 judgments where the courts have dropped the penalty levied by the authorities for E-way bill defaults.

1-  Modern Traders v. State of UP (Writ Tax No. 762 3 of 2018).

Once the E-way bill is produced and other documents clearly indicates that the goods are belongs to the registered dealer and the IGST has been charged there remains no justification in detaining and seizing the goods and asking the penalty.

2- M/s Axpress Logistics India Pvt Ltd. v. Union of India (Writ Tax No. 602 of 2018).

“We have perused the relevant documents, namely, Invoice, Goods receipt, E-way Bills etc., which are enclosed as Annexures to the writ petition and found that the E-way bill under the UPGST Act has been downloaded by the petitioner, much before the detention and seizure of the goods and the vehicle, disclosing all the necessary informations”

3- VSL Alloys (India) Pvt. Ltd. v. State of U.P. and Another

“13. We are in full agreement with the submission of the learned counsel for the petitioner and after perusal of the relevant documents, we find no ill intention at the hands of the petitioner nor the petitioner was supposed to fill up Part-B giving all the details including the vehicle number before the goods are loaded in a vehicle, which is meant for transportation to the same to its end destination.”

4- M/s. Shyam Sel and Power Ltd. v. State of U.P. and Others

“10. For invoking the proceeding under section 129(3) of the CGST Act, section 130 of the CGST Act was required to be read together, where the intent to evade payment of tax is mandatory, but while issuing notice or while passing the order of detention, seizure or demand of penalty, tax, no such intent of the petitioner was observed. Once the dealer has intimated the attending and mediating circumstances under which e-way bill of the purchasing dealer was cancelled, it was a minor breach. The authority could have initiated proceedings under section 122 of the CGST Act instead of proceedings under section 129 of the CGST Act. Section 129 of the CGST Act must be read with section 130 of the said Act, which mandate the intention to evade payment of tax.”

5- J.K. Cement Ltd. v. State of U.P. and Others

““11. On perusal of the impugned order it is also found that it is categorically mentioned that the origination as well as termination of the goods in question was in State of Madhya Pradesh meaning thereby the authorities are of the view that the goods were not to be unloaded in the State of UP or any intention to avoid tax. However, mainly on the ground of some small technical fault for not carrying the e-way bill, the penalty ought not to have been levied in the absence of any discrepancy in document accompanying the goods. In view of above, the impugned orders cannot be sustained in the eyes of law.”

6-Roli Enterprises v. State of UP and Others

This Court noted that the non – generation of Part B of e-Way Bill was a mere technical error, and since the invoice contained the details of the vehicle transporting the goods, there was no intention on part of the petitioner therein to evade tax. Accordingly, the penalty levied in the said case, was held to be unjustified.

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