Expired e-way bill during goods transit: detention and seizure held unjustified without proof of GST evasion; penalty demand quashed.

Detention and seizure of goods and the conveyance were challenged on the sole ground that the e-way bill had expired during transit (about 41 hours before interception). The HC held that mere expiry of an e-way bill in transit, absent any material indicating tax evasion, fraudulent intent, or negligence, does not justify detention/seizure or a consequential demand under the GST framework; the authorities failed to establish any element of evasion. The impugned order raising penalty/tax demand was quashed, and release was directed by allowing the petition.

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Issues:
Challenge to authority demanding tax and penalty under section 129(3) of the Central Goods & Services Tax Act, 2017.

Analysis:
The petitioner, a Private Limited Company, challenged the authority's demand of Rs. 7,53,364/- as tax and penalty under section 129(3) of the CGST Act, 2017. The petitioner's grievance was that due to the truck being in a non-motorable condition, goods could not be delivered on time, leading to the seizure of the truck and goods. The petitioner sought various reliefs, including quashing the impugned order, release of goods and the vehicle, and interim relief pending disposal of the petition.

Upon hearing both sides and examining the relevant legal provisions, the Court considered section 129 of the Act, which deals with detention, seizure, and release of goods and conveyances in transit. The Court noted that the detention was based on the expiry of the e-Way bill, which had expired 41 hours before interception. However, the Court found that the expiration of the e-Way bill during transit could not be a valid ground for detention and seizure of goods and conveyance.

Referring to previous judgments, the Court highlighted a case where the seizure of goods due to the expiry of the e-Way bill was deemed impermissible under the law. The Court emphasized that in the absence of fraudulent intent or negligence, such detention was not justified. In the present case, the Court found no fraudulent intention behind the expiration of the e-Way bill, leading to the allowance of the petition.

As a result, the Court allowed the petition, quashing the impugned order demanding tax and penalty, as well as the order of detention and notice issued under section 129(3) of the Act. The judgment emphasized the importance of establishing fraudulent intent or negligence before seizing goods based on the expiration of the e-Way bill during transit.

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