No Penalty Under Section 129(3) GST for E-Way Bill Non-Filing Due to Technical Glitches Without Tax Evasion Intent

The HC held that the penalty under section 129(3) of the GST Act for non-filing of Part B of the e-way bill could not be imposed where the non-compliance resulted from a technical glitch and there was no intention to evade tax. Previous decisions of the same court were cited, establishing that mere non-filing without intent to evade tax does not attract penalty. The impugned orders imposing penalty were quashed, and the petition was allowed.

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ISSUES:

Whether penalty under section 129(3) of the GST Act can be imposed solely on the ground of non-filling of Part B of the e-way bill.Whether the absence of intention to evade payment of tax affects the imposition of penalty under section 129(3) of the GST Act.Whether a technical glitch causing non-filling of Part B of the e-way bill absolves the petitioner from penalty liability under section 129(3) of the GST Act.Whether the authorities are required to record a finding of intention to evade tax before imposing penalty under section 129(3) of the GST Act.

RULINGS / HOLDINGS:

The Court held that "non-filling of e-way bill will not attract penalty under section 129(3) of the GST Act" in the absence of any intention to evade payment of tax.The Court found that the petitioner's failure to fill Part B of the e-way bill was due to a "technical glitch" and that there was "no intention to evade payment of tax," which is a necessary element for imposing penalty under section 129(3) of the GST Act.The Court noted that "none of the authorities below has recorded any finding with regard to intention to evade payment of tax," and therefore the penalty orders could not be sustained.The impugned orders imposing penalty under section 129(3) of the GST Act were quashed as legally unsustainable.

RATIONALE:

The Court applied the legal framework under section 129(3) of the GST Act, which contemplates penalty for unauthorized movement of goods without proper documentation, but requires a finding of intention to evade tax.The Court relied on precedents from the Division Bench and Single Judge Bench of the same High Court, including rulings that non-filling of e-way bill alone, without evasion intent, does not attract penalty under section 129(3).The Court emphasized that "intention to evade payment of tax" is a critical factor for penalty imposition and mere technical errors do not suffice.This judgment aligns with the established judicial interpretation reaffirming that procedural lapses due to technical glitches cannot be equated with tax evasion under GST law.

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