Mandatory Compliance of Complete E-Way Bill Under GST: A Judicial Reiteration by Allahabad High Court

M/S BM COMPUTERS VERSUS COMMISSIONER COMMERCIAL TAXES AND 2 OTHERS - 2025 (4) TMI 810 - ALLAHABAD HIGH COURT

Abstract

In a significant ruling reinforcing strict compliance under the GST regime, the Allahabad High Court in M/s BM Computers v. Commissioner Commercial Taxes reaffirmed that carrying a complete e-way bill—with both Part A and Part B duly filled—is mandatory for the movement of goods. The judgment clarifies that failure to furnish a valid and complete e-way bill can attract presumptions of tax evasion under the Uttar Pradesh Goods and Services Tax Act, 2017, and Central Goods and Services Tax Act, 2017.

Factual Background

M/s BM Computers, a GST-registered firm engaged in trading of computer and hardware materials, dispatched goods valued at ₹8.45 lakhs and ₹1.43 lakhs from Agra to Ghaziabad. The transportation was facilitated by M/s Shagun Logistics Cargo Services. However, upon interception by the Mobile Squad at 3:16 AM on 06.03.2023, it was found that:

• Only Part A of e-way bill no. 4113 1890 1103 was filled.

• Part B, which is crucial for transportation details, was not updated until 4:28 AM, after the vehicle had already been detained.

• Another invoice, no. ST/OUT/BMC/366, reflected intra-city transport (Agra to Agra), whereas the goods were being transported to Noida—indicative of a mismatch and potential misreporting.

The petitioner contested the imposition of penalty under Section 129(3) of the GST Acts and the subsequent dismissal of its appeal. It claimed the omission was a human error on the part of the transporter and not a deliberate act.

Key Legal Issue

Whether carrying a complete e-way bill (both Part A and B) is mandatory for transportation of goods under GST law, and whether non-compliance can be treated as an intention to evade tax?

Court’s Observations and Reasoning

1. Mandatory Nature of Complete E-Way Bill:

   • The Court emphasized that post the 14th Amendment to the U.P. GST Rules, 2017, effective 01.04.2018, carrying a complete e-way bill is mandatory for any consignment valued over ₹50,000.

   • The requirement is enshrined in Rule 138, which clearly stipulates that both Parts A and B of the e-way bill must be furnished before commencement of movement.

2. Presumption of Tax Evasion:

   • Following precedents like M/s Akhilesh Traders Versus State Of U.P. And 3 Others - 2024 (2) TMI 1128 - ALLAHABAD HIGH COURT and M/s Jhansi Enterprises, Nandanpura, Jhansi Versus State of U.P. And Others - 2024 (3) TMI 219 - ALLAHABAD HIGH COURT, the Court reiterated that non-possession of complete e-way bill can lead to a presumption of intent to evade tax.

   • Such a presumption is rebuttable, but only with credible and timely evidence—which was absent in the present case.

3. Post-Interception Compliance Irrelevant:

   • The fact that Part B was generated after the vehicle was intercepted undermined the petitioner’s claim of inadvertent error.

   • Citing Jhansi Enterprises, the Court held that furnishing documents after interception does not negate the presumption of evasion.

4. Conduct and Intent:

   • The transport of goods from Agra to Noida under the garb of an Agra-to-Agra e-way bill pointed toward deliberate misrepresentation.

   • The Court viewed this as part of a concerted effort to escape detection, possibly using the same documents for multiple consignments.

Conclusion

The Allahabad High Court decisively held that:

• The complete e-way bill (Parts A and B) is compulsory for movement of goods.

• Non-filing of Part B constitutes a statutory lapse, and a presumption of tax evasion arises.

• Human error or post-facto rectification does not exempt the transporter or consignor from penalty under Section 129(3) of the GST Acts.

Thus, the writ petition was dismissed, and the penalty imposed by the department was upheld.

Legal Significance

This judgment is a crucial addition to GST jurisprudence. It reiterates that:

• Compliance under GST is to be meticulous—particularly in procedural aspects like the e-way bill mechanism.

• Businesses must ensure real-time compliance, failing which penal consequences will ensue, even if taxes have been otherwise paid.

Cited Precedents

• M/s Akhilesh Traders Versus State Of U.P. And 3 Others - 2024 (2) TMI 1128 - ALLAHABAD HIGH COURT
• M/s Jhansi Enterprises, Nandanpura, Jhansi Versus State of U.P. And Others - 2024 (3) TMI 219 - ALLAHABAD HIGH COURT
• M/s Falguni Steels Versus State of U.P. And Others - 2024 (1) TMI 1150 - ALLAHABAD HIGH COURT
• M/s. Rawal Wasia Yarn Dying Pvt. Ltd. Versus Commissioner Commercial Tax And Another - 2024 (1) TMI 1245 - ALLAHABAD HIGH COURT
• M/s Indeutsch Industries Private Limited Versus State Of U.P. And 2 Others - 2024 (2) TMI 1073 - ALLAHABAD HIGH COURT
• M/s Varun Beverages Limited Versus State Of U.P. And 2 Others - 2023 (2) TMI 133 - ALLAHABAD HIGH COURT

Final Word

In light of this judgment, traders and transporters are advised to review and tighten their logistics compliance protocols, especially regarding the e-way bill system, to avoid future penal proceedings.