E-Way Bill Expiry Due to Vehicle Breakdown Not GST Evasion: Allahabad HC Quashes Seizure and Penalty Orders [Read Order]
The Court observed that the petitioner generated a new e-way bill before the penalty order was issued and that there was no evidence of intent to evade tax.

E-Way Bill - Expiry - Taxscan
E-Way Bill - Expiry - Taxscan
The Allahabad High Court has held that mere expiry of an e-way bill due to a vehicle breakdown does not imply an intent to evade tax under the Goods and Services Tax ( GST ) Act. The Court quashed the seizure and penalty orders passed observing that technical lapses caused by unforeseen circumstances cannot be equated with tax evasion.
The petitioner company, Trimble Mobility Solutions India Pvt. Ltd., is engaged in providing vehicle tracking services across India and holds valid GST registrations in multiple states, including Uttar Pradesh, Haryana, Maharashtra, and Tamil Nadu.
It had entered into a contract with the Surveyor General of India (National Geo-Spatial Data Centre) for the supply and installation of GPS tracking devices.
During transportation of these devices, a vehicle breakdown occurred while the goods were in transit. The e-way bill accompanying the consignment was valid for twelve days and expired on 20 December 2022 due to the delay. The driver, without informing the petitioner, attempted repairs and subsequently shifted the goods into another vehicle to complete the journey.
On 22 December 2022, the goods were intercepted by tax authorities on the ground that the e-way bill had expired. Before the authorities could pass a seizure order, the petitioner generated a fresh e-way bill the same day at 11:30 a.m..
Despite this, the authorities proceeded to impose a penalty and seize the goods under Section 129(3) of the CGST Act. The petitioner’s appeal was also rejected by the appellate authority on 17 June 2023.
The petitioner argued that the delay was unintentional and caused solely by the mechanical breakdown of the vehicle. Since a valid tax invoice and e-way bill were initially issued and a new one was promptly generated before the seizure order, there was no attempt to evade tax.
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The petitioner depended on several precedents, including the Supreme Court’s decision in Assistant Commissioner (ST) v. Satyam Shivam Papers Pvt. Ltd. and Allahabad High Court rulings in Ashoka P.U. Foam (India) Pvt. Ltd. v. State of U.P. (2024), Riadi Steels LLP v. State of U.P. (2024), and Globe Panel Industries India Pvt. Ltd. v. State of U.P. (2024), all of which held that mere expiry of an e-way bill without intent to evade tax does not justify penalty proceedings.
The State contended that since the e-way bill had expired when the goods were intercepted, the petitioner had violated GST provisions. It argued that even if the vehicle had broken down, the petitioner was obligated to generate a new e-way bill before resuming transportation.
Justice Piyush Agrawal noted that the facts were undisputed that the goods were being transported under a valid tax invoice and e-way bill, which expired only because of the vehicle breakdown.
The Court observed that the petitioner generated a new e-way bill before the penalty order was issued and that there was no evidence of intent to evade tax.
The bench said that its consistent position that expiry of an e-way bill, by itself, cannot be considered an indication of tax evasion, particularly when the movement of goods and tax documentation are otherwise bona fide.
While setting aside both the seizure and penalty orders dated 27 December 2022 and 17 June 2023, the Court held that the proceedings under Section 129(3) were unsustainable in law. It quashed the impugned orders, allowing the writ petition.
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