2025 (4) TMI 810 - HC - GST

Mandatory complete e-way bills required for goods transportation, incomplete documentation creates tax evasion presumption

M/s BM Computers Versus Commissioner Commercial Taxes And 2 Others

The Allahabad HC dismissed a petition challenging the mandatory requirement of complete e-way bills for goods transportation. The court held that ... Interpretation of statute - whether carrying complete eway bill is mandatory for the movement of goods from one place to another? - HELD THAT:- The question is no more res integra after the 14th Amendment of the Uttar Pradesh Goods and Service Tax Rules, 2017 which came into effect from 01.04.2018. Post amendment in the Rule, it has become obligatory that goods should be accompanied with complete e-way bill. The co-ordinate Bench in Akhilesh Traders [2024 (2) TMI 1128 - ALLAHABAD HIGH COURT] had held that in case goods are not accompanied by e-way bill, a presumption may be read that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/ transporter of the goods. In Jhansi Enterprises [2024 (3) TMI 219 - ALLAHABAD HIGH COURT], the co-ordinate Bench following the decision rendered in Akhilesh Traders further held that mere furnishing of documents subsequent to interception cannot be a valid ground to show that there was no intention to evade tax. The Court further held that reliance placed upon the decision by petitioner therein was of transaction prior to April, 2018 but after April, 2018, those difficulties have been resolved and there is no difficulty in generating and downloading the e-way bill. In the instant case, it is an admitted case that the goods were intercepted by respondent no. 2 on 06.03.2023 at 3:16 a.m., while only Part A of the invoice No. ST/OUT/BMC/365, e-way bill no. 4113 1890 1103 was filled and Part B of the e-way bill required for transportation was not filled and it was generated on 06.03.2025 at 4:28 AM that is after about one hour when the vehicle was intercepted. Further, invoice no. ST/ OUT/BMC/366, e-way bill no. 4113 1891 6631 reflected that goods were being transported from Agra to Agra while the goods were brought from Agra to Noida for which no document was available - Moreover, conduct of the petitioner clearly reveals that an intention to evade the tax is there as not only the goods in transit were not accompanied by Part B of e-way bill but also goods were being transported from Agra to Noida while the e-way bill was issued by the petitioner firm from Agra to Agra. Conclusion - It is mandatory on the part of the seller to download the complete e-way bill once the goods are put in transit. Only downloading Part A of e-way bill and non filling of Part B would not absolve the liability under the Act. Petition dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe primary issue considered by the Court was whether carrying a complete e-way bill is mandatory for the movement of goods under the U.P. State Goods and Service Tax Act, 2017 and Central Goods and Service Tax Act, 2017, and whether the absence of a complete e-way bill implies an intention to evade tax.2. ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents:The legal framework revolves around Section 129(3) of the U.P. State Goods and Service Tax Act, 2017, and the Central Goods and Service Tax Act, 2017, which deal with the imposition of penalties for non-compliance. Rule 138 of the Act mandates a complete e-way bill for the movement of goods. The Court referenced the 14th Amendment of the Uttar Pradesh Goods and Service Tax Rules, 2017, effective from April 1, 2018, which made it obligatory to accompany goods with a complete e-way bill.Court's interpretation and reasoning:The Court interpreted the law to mean that a complete e-way bill is mandatory for the movement of goods. The absence of Part B of the e-way bill at the time of interception was seen as a failure to comply with statutory requirements. The Court emphasized that post-April 2018, generating and downloading the e-way bill has been streamlined, thus non-compliance suggests an intention to evade tax.Key evidence and findings:The vehicle carrying the goods was intercepted at Luharli Toll Plaza, Greater Noida, and only Part A of the e-way bill was filled. Part B was generated an hour after interception. Additionally, discrepancies were noted in the transportation documents, as the e-way bill indicated transport from Agra to Agra, while the goods were actually moved from Agra to Noida.Application of law to facts:The Court applied Rule 138, which requires a complete e-way bill before the commencement of goods movement. Given the facts, the Court concluded that the petitioner failed to comply with this requirement, thereby justifying the imposition of penalties under Section 129(3).Treatment of competing arguments:The petitioner argued that the omission was a human error and that the goods were covered by tax invoices. They cited previous judgments where similar omissions were treated leniently. However, the Court distinguished these cases based on the timing of the transactions (pre-April 2018) and the subsequent amendments that resolved earlier difficulties in generating e-way bills.Conclusions:The Court concluded that the petitioner had not complied with the mandatory requirement of a complete e-way bill and that the subsequent generation of Part B did not absolve them of liability. The Court upheld the penalty imposed by the authorities.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning:The Court cited the decision in Akhilesh Traders, stating: '...in the event the goods are not accompanied by the invoice or the e-way bill, a presumption may be raised that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/transporter of the goods.'Core principles established:The Court established that post-April 2018, the requirement for a complete e-way bill is non-negotiable, and failure to comply can lead to a presumption of tax evasion. This presumption can only be rebutted by providing adequate materials justifying the non-compliance.Final determinations on each issue:The Court determined that the petitioner did not provide sufficient justification for the absence of a complete e-way bill at the time of interception. The imposition of penalties by the authorities was deemed appropriate and in accordance with the law. The writ petition was dismissed, affirming the actions of the tax authorities.