GST E-way bill Expires due to Kanwar Yatra Traffic ban: Allahabad HC says No Tax Evasion Found, Quashes Penalty [Read Order]

The Allahabad High Court has quashed a penalty imposed under Section 129(3) of the UP GST ( Goods and services Tax ) Act, holding that the expiry of an e-way bill caused due to Kanwar Yatra traffic restrictions cannot be treated as an act of tax evasion.

Justice Jaspreet Singh observed that when the entire movement of goods was transparent, properly documented, and undisputed by the GST authorities, the mere technical lapse of non-renewal of an e-way bill cannot justify penalty proceedings

The petitioner, Sachin Jain, had dispatched a consignment of mentha oil from Barabanki to Badaun on 1 August 2024 after generating a valid e-invoice, e-way bill, Form 9R under the Mandi Adhiniyam, and a Mandi Gate Pass.

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The goods reached the outskirts of Badaun by 2 August 2024. However, due to the Shravan-month Kanwar Yatra, the District Administration imposed a ban on entry of heavy vehicles into the city from 2 to 5 August. As a result, the truck carrying the goods was forced to halt outside the city limits until restrictions were lifted.

When traffic resumed, the truck entered Badaun and was intercepted by the Mobile Squad on 5 August. The GST officers found no discrepancy in any documents, nor in the quantity, quality, nature, or value of the consignment.

The sole issue was that the e-way bill, originally valid until 3 August, had expired by two days due to the forced halt. Despite the delay being caused by government-imposed traffic restrictions, the authorities issued a show cause notice and subsequently levied a penalty of nearly ₹25 lakh.

The High Court found this approach legally untenable. Further, it was noted that the GST Department was already aware of the consignment’s movement through the e-way bill and invoices, and the authorities did not dispute the authenticity of any document.

In addition, the Court said that no material was placed on record to establish any intent to evade tax, which is an essential ingredient for imposing a penalty under Section 129.

The bench held that a mere technical violation, especially when caused by circumstances beyond the transporter’s control, cannot lead to such harsh penal consequences.

Further, the single bench quoting the Supreme Court decisions in Assistant Commissioner (ST) v. Satyam Shivam Papers Pvt. Ltd, observed that mens rea (intent to evade tax) is mandatory for imposing Section 129 penalties. In the present case, the State authorities could not point to any such intention or any misuse of the e-way bill.

Accordingly, the High Court quashed both the penalty order and the appellate order, holding that the proceedings were unsustainable in law.

Sachin Jain vs State of U.P. Thru. Prin. Secy. State Taxes Lko , 2025 TAXSCAN (HC) 2365 , WRIT TAX No. - 229 of 2024 , 12 November 2025 , Mudit Agarwal, Kazim Ibrahim , C.S.C.