E-Way Bill Expired during Transit: Gujarat HC Quashes Penalty and Demand Orders for Want of “Ill-Intent” [Read Order]

In a significant ruling, a division bench of the Gujarat High Court has held that since the assessee does not have ill-intent to evade GST as the e-way bill expired during the transit.

The petitioner, Orson Holdings Company Limited challenged an order demanding the tax and penalty under Section 129(3) of the Central Goods & Services Tax Act, 2017, where the goods, which were to be delivered on or before 17.10.2022, could not be delivered in time and on 19.10.2022 when inspected, some of the e-Way bill numbers had shown expired. The entire truck along with the goods had been seized on account of expiration of the e-Way bill.

Considering the petition, Justice Sonia Gokani and Justice Sandeep N. Bhatt observed that “in the instant case also, as we could notice that the goods of the said vehicle has been detained at 6:05 p.m. at Amirgadh on 27.9.2018, after about expiry of 48 years. This case is squarely covered by the decision of this Court which has not been further challenged and even otherwise, from the facts which are robust in nature, it can be gathered that there does not appear to be any ill-intent on the part of the petitioner to use the expired e-Way bill. The company is situated at Howrah, West Bengal and the place of delivery was Jamnagar, Gujarat and in transit, this e-Way bill has expired.”

Granting relief to the petitioners, the Court held that “the impugned order dated 28.09.2018 demanding a sum of Rs.63,40,000/- is quashed and set aside. The order of detention as well as the further notice issued under Section 129(3) of the CGST Act in FORM GST MOV-07 is also quashed and set aside, with all consequential benefits. The tax of Rs.11,41,200/- and the matching amount of penalty had been recovered, making it total of Rs.22,82,400/-. The penalty being an additional amount in wake of this quashment, the same shall be refunded to the petitioner with interest, within eight weeks.”

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