Technical e-way bill non-compliance cannot sustain GST penalty absent any finding of intent to evade tax.

A mere technical lapse in e-way bill compliance, without material showing intent to evade tax, does not justify penal action under the GST regime. The goods carried the correct invoice, the address was reflected, and the description matched the invoice; the only default was non-downloading of the relevant e-way bill form. As the impugned orders recorded no allegation of tax evasion and still imposed the maximum penalty, the HC held that proceedings under Section 129(3) and the consequential seizure and penalty orders were unsustainable. The orders were set aside.

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Issues: Whether proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 and the consequential penalty could be sustained when the alleged default was only a technical lapse in e-way bill compliance and there was no material showing intention to evade tax.

Analysis: The goods carried the correct invoice, the address was reflected, and the description of goods matched the invoice. The alleged infraction was confined to non-downloading of the relevant e-way bill form. The impugned orders did not record any allegation of tax evasion, and the authorities nevertheless imposed the maximum penalty. In the light of the earlier Division Bench view on the effect of changing e-way bill requirements and the absence of fraudulent or deliberate default, the court found no sustainable basis for treating the lapse as tax evasion.

Conclusion: The penalty and seizure orders were unsustainable and were set aside, with the result in favour of the petitioner.

Final Conclusion: Relief was granted by nullifying the impugned orders, as the case involved only a technical non-compliance without proof of intent to evade tax.

Ratio Decidendi: A mere technical lapse in e-way bill compliance, without a finding of intent to evade tax, does not justify penal action under the goods and services tax regime.

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