Technical e-way bill defect cannot sustain GST penalty absent intent to evade tax

Penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 was held unsustainable where Part B of the e-way bill was not generated because of technical difficulty and there was no material showing intention to evade tax. The defect was treated as purely technical, and the precedent on non-filling of Part B in the absence of tax evasion was applied to the facts. The impugned orders were quashed, and consequential relief, including return of the security amount, followed.

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Issues: Whether penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 was sustainable where Part B of the e-way bill was not generated due to technical difficulty and there was no intention to evade tax.

Analysis: The defect in the e-way bill was found to be purely technical. The department failed to indicate any intention on the part of the petitioner to evade tax. The cited precedent on non-filling of Part B of the e-way bill in the absence of tax evasion applied directly to the facts of the case.

Conclusion: The penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 was unsustainable and the impugned orders were liable to be quashed.

Final Conclusion: The writ petition succeeded, and the petitioner was granted consequential relief, including return of the security amount.

Ratio Decidendi: Mere technical non-compliance with e-way bill requirements does not justify penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 in the absence of material indicating an intention to evade tax.

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