Expiry of GST E-Way Bill Does Not Imply Tax Evasion Intent: Allahabad HC Quashes Seizure Orders [Read Order]

The Allahabad High Court ruled that the mere expiry of a GST ( Goods and Services Tax ) e-way bill does not indicate an intention to evade tax, thereby setting aside the seizure and penalty orders passed by the GST authorities.

‘Expiry of e-way bill will not attribute to intention to evade payment of tax’ said Justice Piyush Agarwal

M/s Trimble Mobility Solutions India Private Limited, the petitioner engaged in providing vehicle tracking services across India, was registered under GST in multiple states including Haryana, Maharashtra, Uttar Pradesh, and Tamil Nadu.

It had entered into a contract with the National Geo-Spatial Data Centre, Department of Surveyor General of India for the supply and maintenance of GPS devices. During the course of delivery, the goods were transported under a valid e-way bill, which was initially valid for 12 days from its generation.

However, while the goods were in transit, the vehicle suffered a breakdown. The driver, without informing the petitioner, attempted to repair the vehicle but failed and subsequently shifted the goods into another vehicle. Owing to this unforeseen breakdown and delay, the e-way bill expired on December 20, 2022.

The goods were later intercepted by the authorities on the ground that the e-way bill had expired. However, before the seizure order was passed, the petitioner had generated new e-way bills on December 22, 2022, at 11:30 a.m.

Despite this, the Proper Officer passed a seizure order under Section 129(3) of the CGST Act on December 27, 2022.

The appeal against this order was dismissed on June 17, 2023, without appreciating that the delay had occurred due to the vehicle’s breakdown and that there was no intention to evade payment of tax.

The State, on the other hand, contended that since the e-way bill had expired, the transportation violated the GST provisions, and that even if the breakdown occurred, the petitioner was obliged to generate a new e-way bill before resuming transportation. Hence, the seizure and penalty proceedings were justified.

The Court, however, disagreed with the State’s reasoning and observed that the goods were accompanied by genuine tax invoices and valid e-way bills, and that the breakdown was an admitted fact which delayed the movement of goods.

The bench also noted that fresh e-way bills were generated before the passing of the seizure order, thus ruling out any tax evasion attempt.

The Court upheld that mere technical lapse like expiry of an e-way bill when accompanied by bona fide circumstances such as vehicle breakdown cannot justify harsh penal action under Section 129 of the GST Act.

Accordingly, the court quashed the orders.

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