Expired e-way bill alone is not enough for penalty when there is no material showing intent to evade tax.

Penalty under Section 129(3) of the Uttar Pradesh GST Act could not be sustained where goods were accompanied by invoice and e-way bill, the vehicle was intercepted with the relevant documents, and no discrepancy was found in the goods. The only lapse was that the e-way bill had expired before interception and was not renewed. The HC held that penalty under Section 129(3) requires material showing intent to evade tax; absent such material, a mere technical breach does not justify penal action. The impugned orders were therefore liable to be set aside.

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Issues: Whether penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained for an expired e-way bill when the transaction documents were otherwise in order and there was no material indicating an intent to evade tax.

Analysis: The facts were undisputed that the goods were covered by invoice and e-way bill, the vehicle was intercepted with the relevant documents, and no discrepancy was found in the quality, quantity, value, or nature of the goods. The only lapse was that the e-way bill had expired before interception and was not renewed. The Court held that imposition of penalty under Section 129(3) required some material enabling the authority to form satisfaction that there was an intent to evade tax. On the record, no such material was shown, and the lapse was at most a technical violation. The absence of any indication of tax evasion meant that the penal action could not be justified.

Conclusion: Penalty under Section 129(3) could not be sustained and the impugned orders were liable to be set aside.

Ratio Decidendi: Penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 cannot be imposed for a mere technical breach such as expiry of an e-way bill unless there is material showing intent to evade tax.

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