2025 (6) TMI 254 - HC - GST

Incomplete E-Way Bill Violation Nullified: Technical Error Not Equivalent to Tax Evasion Intentional Misconduct

HC quashed penalty under GST Act for incomplete e-way bill, ruling that mere technical non-compliance without proven tax evasion intent does not warrant ... Levy of penalty u/s 129(3) of the U.P. G.S.T. Act, 2017 - though the e-way bill, was being carried, the part-B of the same was not filled up based on which, notice was issued to the petitioner - HELD THAT:- A perusal of the order impugned passed by Assistant Commissioner, Sector 5 (Mobile Squad 5), Gautam Buddha Nagar, Uttar Pradesh would reveal that except for noticing violation of provisions of Rule 138 on account of non-filling up of part-B of eway bill, not a word has been indicated pertaining to any attempt to evade tax. In view of the series of orders passed by this Court laying down that unless an attempt is made to evade tax and a finding in this regard is recorded, mere non-filling of part-B of e-way bill would not attract penalty under Section 129 of the Act, the order impugned passed by the respondents cannot be sustained. Petition allowed. The Allahabad High Court, in a writ petition challenging the penalty imposed under Section 129(3) of the U.P. G.S.T. Act, 2017, held that mere non-filling of part-B of the e-way bill, without any recorded finding of intention to evade tax, does not attract penalty. The Assistant Commissioner had imposed the penalty solely on the basis of violation of Rule 138 of the G.S.T. Rules, 2017, due to incomplete e-way bill documentation. The Court relied on its consistent precedent in M/s Precision Tools India vs. State of U.P., emphasizing that 'unless an attempt is made to evade tax and a finding in this regard is recorded,' penalty under Section 129 cannot be sustained. Since the impugned order lacked any such finding, it was set aside, and the vehicle and goods were ordered to be released.