Mere Non-Filling of Part-B of E-Way Bill due to Technical Glitch cannot attract GST Penalty without Intent to Evade Tax: Allahabad HC [Read Order]

In a recent ruling, the Allahabad High Court held that mere non-filling of Part B of an e-way bill due to a technical glitch cannot attract penalty under the Goods and Services Tax Act unless there is a clear intention to evade tax, and that penalty proceedings cannot be sustained without such a finding.

Agrim Wholesale Private Limited filed a writ petition before the Allahabad High Court challenging the penalty order dated 3 May 2025 and the appellate order dated 29 July 2025 passed by GST authorities under Section 129(3) of the GST Act.

The petitioner is engaged in wholesale trading of agricultural inputs such as seeds, fertilizers, pesticides, insecticides, and tools, and is registered under the GST Act with a valid GSTIN. On 2 May 2025, a vehicle carrying the petitioner’s goods was intercepted during transit.

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At the time of interception, the tax invoice and other required documents were produced, and the goods were found to be in accordance with the invoice. However, Part B of the e-way bill had not been generated.

Based solely on the non-filling of Part B of the e-way bill, the authorities seized the goods and imposed a penalty underSection 129(3) of the GST Act. The petitioner challenged the penalty by filing an appeal, but the appellate authority dismissed the appeal, leading to the present writ petition.

The petitioner’s counsel argued that all documents except Part B of the e-way bill were duly filled and that the failure to generate Part B was due to a technical glitch. They further argued that there was no intention to evade payment of tax and that the authorities had not recorded any finding to that effect.

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The counsel also argued that the penalty order was passed without assigning any reasons and relied on earlier judgments of the Allahabad High Court which held that penalty cannot be imposed merely for non-filling of the e-way bill without intent to evade tax.

On the other hand, the State’s counsel argued that since the goods were in movement and Part B of the e-way bill was not filled, the initiation of proceedings was justified. They could not dispute the legal position laid down in the earlier judgments relied upon by the petitioner.

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Justice Piyush Agrawal observed that none of the authorities had recorded any finding regarding the petitioner’s intention to evade tax. The court explained that non-filling of Part B of the e-way bill, particularly when caused by a technical error, does not by itself justify the imposition of penalty under Section 129(3) of the GST Act.

The court pointed out that this legal position had already been settled by the Division Bench in the M/s Tata Hitachi Construction Machinery Company Private Limited Vs. State of U.P. & Others (2025), and followed consistently in subsequent decisions. The court held that in the absence of any intention to evade tax, the penalty proceedings were not sustainable in law.

The court quashed both the penalty order dated 3 May 2025 and the appellate order dated 29 July 2025. The authorities were directed to refund any amount deposited by the petitioner within two months from the date of production of a certified copy of the order. The writ petition was allowed.

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