Penalty for expired e-way bill set aside where documents were present and no intent to evade tax was shown.

Penalty under Section 129(3) of the Uttar Pradesh GST Act could not be sustained where the goods were accompanied by the tax invoice and e-way bill, and the brief expiry of the e-way bill before interception was explained by a vehicle breakdown. The court treated the lapse as a technical breach because there was no material showing intention to evade tax. Authorities were required to examine whether the facts disclosed mens rea to evade tax before imposing penalty, and on the record that element was absent.

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Issues: Whether penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained when the goods were accompanied by the tax invoice and e-way bill, the e-way bill had expired shortly before interception, and the explanation for delay showed no intention to evade tax.

Analysis: The goods were found with the relevant documents, and the explanation that the vehicle had broken down was treated as a plausible cause for delay. The expiry of the e-way bill, in the absence of any material indicating an attempt to evade tax, was held to be only a technical breach. The authorities were required to consider whether the facts disclosed mens rea to evade tax before imposing penalty.

Conclusion: Penalty under Section 129(3) was not sustainable, as the factual matrix did not establish intention to evade tax.

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