E-way bill expiry alone does not justify GST detention where goods are genuine and no intent to evade tax is shown.

Mere expiry of an e-way bill during transit did not justify detention and penalty under section 129 of the CGST Act where the goods were covered by valid commercial documents, physical verification showed no discrepancy in description or quantity, and there was no material indicating intent to evade tax. The Jharkhand HC treated the short delay as a bona fide lapse, noting the vehicle was near its destination and there was no allegation of fraud or deliberate evasion. On that basis, invocation of section 129 read with rule 138 was held unwarranted and the tax and penalty orders were liable to be quashed.

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Issues: Whether mere expiry of the e-way bill during transit, without any discrepancy in the goods or evidence of intent to evade tax, justified invocation of section 129 of the Central Goods and Services Tax Act, 2017 read with rule 138 of the Central Goods and Services Tax Rules, 2017 and the consequent tax and penalty.

Analysis: The goods were accompanied by valid commercial documents and physical verification disclosed no discrepancy in description or quantity. The only lapse was that the e-way bill had expired by a few hours while the vehicle was held up near the destination. The Court treated the surrounding circumstances, including the proximity of the vehicle to the destination and the absence of any allegation of fraud or deliberate evasion, as showing that the expiry of the e-way bill was a bona fide occurrence and not a contravention warranting penal action under section 129. The Court also relied on the settled view that where there is no intention to evade tax and the movement of goods is otherwise genuine, detention and penalty are not justified.

Conclusion: Mere expiry of the e-way bill, by itself and in the absence of intent to evade tax, did not justify the tax and penalty imposed under section 129, and the impugned orders were liable to be quashed in favour of the petitioner.

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