Expired e-way bill cases require proportionate penalty, not automatic maximum sanction, absent any indication of tax evasion.

Expired e-way bill transit does not automatically justify the maximum penalty under Section 129 of the WBGST/CGST Act where there is no allegation of intent to evade tax and no dispute about the goods or accompanying documents. The discussion emphasises that Rule 138 permits extension of validity within the prescribed time, and that mitigating transit-related circumstances must be considered by the authority. In such cases, the penalty must be proportionate to the breach rather than imposed at the highest level as a matter of course.

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Issues: Whether penalty equal to 200% of the tax payable was justified under Section 129 of the WBGST/CGST Act, 2017 for transportation of goods after expiry of the e-way bill, in the absence of any allegation of intent to evade tax and in the presence of mitigating transit-related circumstances.

Analysis: The e-way bill had expired before interception of the vehicle, and the statutory scheme under Rule 138 of the West Bengal Goods and Services Tax Rules, 2017 permits extension of validity within the prescribed time. However, the case involved no dispute regarding the identity, quantity, nature, weight, or accompanying documents of the goods, and there was no allegation of tax evasion. The circumstances placed before the authorities, including disruption of movement and delayed transit, were not dealt with in the adverse orders. In such a situation, the mere expiry of the e-way bill did not automatically warrant the maximum penalty under Section 129. The default called for a calibrated response commensurate with the nature of breach.

Conclusion: The penalty of 200% was not justified. The order imposing such penalty was set aside and the matter was confined to a notional penalty of Rs. 25,000.

Ratio Decidendi: Where goods are transported with an expired e-way bill but there is no material indicating intent to evade tax and no dispute about the goods or documents, the maximum penalty under Section 129 is not automatic and the authority must impose a proportionate penalty based on the attendant circumstances.

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