The applicant is a trader transporting goods dated 21.12.2021, a tax invoice was issued, but because of a technical glitch, the e-way bill cannot be generated quickly. The e-way bill was generated at 10:59 AM on 21.12.2021. On the same the vehicle was intercepted by the GST Mobile Squad at 11:29 AM.
The e-way bill during interception was not carried along with the goods; therefore, a Show Cause Notice (SCN) was issued. A reply and e-way bill generated before the interception were submitted by the applicant. On 03.12.2022, the appeal was dismissed, but the appellate authority recorded a finding that the e-way bill was generated before interception.
The applicant relied upon the judgment in OSR Creation (2025), while the State relied upon Aysha Builders (2025).
Problem:
Whether a penalty u/s 129 of the CGST/UPGST Act can be charged when the e-way bill was admittedly generated before the interception of the goods, but was not carried during detention, and was thereafter produced along with the reply?
Had that:
The court said that the e-way bill was generated at 10:59 AM, which was 30 minutes before interception. The same establishes that no intent was there to evade tax. The court repeated the norms from earlier rulings: if valid documents were generated before the seizure and no discrepancy is discovered in these documents, then the imperfect is only procedural. U/s 129, the penalty is unjustified without proof of intention to evade tax.
The court, while separating Aysha Builders, noted that in that case, the GST e-way bill was generated after detention, whereas here it was generated before interception, which makes the penalty unjustified.
Both the authorities failed to exhibit any part of mens rea or attempt to evade tax. The procedural lapse stood cured if the e-way bill was produced before passing the seizure order.
The court held that u/s 129, no penalty could be sustained when the e-way bill was generated before interception. No intent is there to evade tax. The impugned orders of seizure, detention, and penalty were unsustainable and must be quashed.
Also Read: GST E Way Bill Preparation Guide for Transport Companies & Suppliers
As per that, the writ petition is permitted. As per the law, any deposited amount pursuant to the penalty will be refunded.
| Case Title | M/s. Om Enterprises Vs Additional Commissioner |
| Case No. | WRIT TAX No. – 629 of 2023 |
| Counsel for Appellant | Mohit Kumar Shukla, Nipun Mohan, Tarun Agrawal |
| Conunsel for Respondent | C.S.C. |
| Allahabad High Court | Read Order |
