Expired e-way bill alone cannot justify GST penalty without evidence of tax evasion or misuse.

A technical lapse involving an expired e-way bill, by itself, did not justify penalty where the goods were accompanied by proper documents, matched the invoice, and there was no material showing an intention to evade tax. The expiry was explained by vehicle engine trouble, and the absence of repeated misuse or evasive conduct made the penalty under the Uttar Pradesh GST Act unsustainable. On that basis, the penalty and appellate orders were quashed and the amount deposited toward tax and penalty was directed to be refunded.

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Issues: Whether penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained where the only discrepancy was expiry of the e-way bill and there was no material to show intention to evade tax.

Analysis: The goods were supported by relevant documents and corresponded with the invoice. The discrepancy was confined to the expiry of the e-way bill, which was explained as having occurred because the vehicle developed engine trouble. In such circumstances, the mere technical lapse, without any indication of repeated misuse of the e-way bill or an attempt to evade tax, did not justify imposition of penalty under Section 129(3) of the Act.

Conclusion: The penalty order and the appellate order were unsustainable and were quashed. The respondents were directed to refund the amount of tax and penalty deposited by the petitioner.

Final Conclusion: The writ petition succeeded, and the petitioner obtained relief against the levy of penalty and the consequential recovery.

Ratio Decidendi: A technical breach relating to an expired e-way bill, by itself and absent material showing intention to evade tax, does not warrant penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017.

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