Only Downloading Part A of E-way bill and Non-filling of Part B would not absolve Liability under GST Act: Allahabad HC [Read Order]

The Allahabad High Court ruled that failure to fill Part B of an e-way bill, even if Part A is duly generated, does not shield a transporter or consignor from penalty under the GST (Goods and Services Tax) Act.

Justice Rohit Ranjan Agarwal ruled that “It is mandatory on the part of the seller to download the complete e-way bill once the goods are put in transit. Only downloading Part A of e-way bill and non filling of Part B would not absolve the liability under the Act.”

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M/s B M Computers, the petitioner was transferring stock worth Rs. 8,45,000 and Rs. 1,43,500 inclusive of tax, were transported using the services of M/s Shagun Logistics Cargo Services. However, during transit, the vehicle carrying the goods was intercepted at Luharli Toll Plaza, Greater Noida, on March 6, 2023, at 3:16 AM.

A physical verification revealed that Part B of the e-way bill, which is mandatory for transportation, was not filled at the time of interception, leading to a detention order and subsequent penalty imposition by the Assistant Commissioner, State Tax, Mobile Squad, Noida.

The department concluded this delay demonstrated an intent to evade tax, especially because a second invoice incorrectly showed goods moving from Agra to Agra, despite the actual destination being Noida. The Assistant Commissioner levied a penalty under Section 129(3) of the CGST/UPGST Act, which was later upheld by the appellate authority. The petitioner paid the penalty to secure release of the goods and then challenged the penalty order through an appeal, which was subsequently dismissed.

Justice Agarwal held that under Rule 138 of the Central GST Rules, 2017 a complete e-way bill comprising both Part A and Part B is mandatory before the commencement of goods movement. The Court stated that simply generating Part A does not fulfill the statutory requirement, and post-facto generation of Part B does not negate liability.

The judgment cited rulings, including Akhilesh Traders and Jhansi Enterprises, which established that the absence of a complete e-way bill creates a rebuttable presumption of intent to evade tax. In this case, the petitioner could not provide sufficient evidence to rebut that presumption.

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Moreover, the bench noted that “Moreover, conduct of the petitioner clearly reveals that an intention to evade the tax is there as not only the goods in transit were not accompanied by Part B of e-way bill but also goods were being transported from Agra to Noida while the e-way bill was issued by the petitioner firm from Agra to Agra.”

It was clarified that judgments cited by the petitioner where relief was granted in similar situations pertained to the period before April 2018, when the GST system was still evolving. Since then, technical and procedural improvements have removed earlier difficulties in generating complete e-way bills.

To Read the full text of the Order CLICK HERE

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