Absence of E-Way Bill at Commencement of Transportation Validates Seizure of Goods: Allahabad HC [Read Order]

The Allahabad High Court has upheld the seizure of goods and the consequential order passed under Section 129(3) of the GST Act, ruling that failure to generate or produce an e-way bill prior to the commencement of movement of goods fully justifies the action taken by the authorities.

The petitioner, M/s Birds RO System Private Limited, is engaged in the wholesale and retail trading of RO/water purifier systems and related parts. Acting on purchase orders, the petitioner issued tax invoices to M/s Birds Aqua Service, Rewa, and handed them over to the transporter.

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Subsequent fresh orders led to the issuance of additional tax invoices, three of which crossed the ₹50,000 threshold, thereby mandating the generation of an e-way bill. The petitioner claimed it had specifically directed the transporter not to move the goods without the e-way bill, which could not be generated due to an alleged technical glitch.

Despite this, the transporter proceeded to load the goods onto the vehicle and commenced the journey. The Mobile Squad, led by the Assistant Commissioner, intercepted the vehicle during transit. Only tax invoices were found, no e-way bill was available at the time of interception. Seizure followed, and an order was passed under Section 129(3) of the GST Act.

The petitioner appealed before the Additional Commissioner but the appeal was dismissed. That dismissal order was then challenged before the High Court.

Vishnu Kesarwani, representing the petitioner argued that there was no intention to evade tax, evidenced by the instructions given to the transporter and the fact that the petitioner regularly files GST returns and pays taxes. It was submitted that the e-way bill could not be generated due to a technical issue, and the appellate authority failed to consider this explanation. Further, contended that the seizure was unwarranted and illegal, especially as the dealer was compliant and there was no attempt to circumvent tax liability.

The bench of Justice Piyush Agrawal observed that it was undisputed that no e-way bill was available or generated prior to the commencement of transportation. The Court emphasized that the e-way bill was produced only after interception, a fact that placed the case squarely within the ambit of M/s Aysha Builders & Suppliers Vs. State of U.P. & Others (2025) and M/s Mohini Traders Vs. State of U.P. & Others (2025) holding that post-detention generation of e-way bills does not rectify the initial illegality.

Consequently, the Court held that the seizure was lawful and the appellate authority had rightly affirmed the order under Section 129(3). The High Court dismissed it, holding that the authorities acted correctly in treating the transportation without an e-way bill as a violation warranting seizure.

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