TaxTMI 
TaxTMI 
2026 (10) TMI 205
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....ttar Pradesh. The goods were being transported under the relevant tax invoice and e-way bill generated in accordance with the provisions of the CGST/UPGST Act, 2017 and the rules made thereunder. 1.3. The e-way bill accompanying the consignment was valid up to 22.10.2025 at 11:59 PM. However, due to the delay in transportation and non-extension of the validity of the e-way bill, the vehicle carrying the goods was intercepted by the departmental authorities on 24.10.2025 at approximately 06:00 AM, near the declared ship-to address at Ayodhya, Uttar Pradesh. 1.4. After interception of the vehicle, the proper officer examined the documents accompanying the goods and observed that the validity of the e-way bill had expired before the interception. On the basis of the said discrepancy, proceedings were initiated under Section 129 of the CGST/UPGST Act, 2017, treating the transportation of goods without a valid e-way bill as a contravention of the applicable statutory provisions. 1.5. Consequently, the proper officer passed Order No. ZD091025142632M dated 24.10.2025, imposing a penalty of Rs. 1,57,516/- upon the appellant under Section 129 of the CGST/UPGST Act, 2017. The appell....
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.... CGST/UPGST Act, 2017. 2. QUESTION OF LAW 2.1. Whether the mere expiry of the validity of an e-way bill, without any independent evidence establishing an intention to evade tax, is sufficient to justify the imposition of penalty under Section 129 of the CGST/UPGST Act, 2017? 2.2. Whether the penalty imposed under Section 129 of the CGST/UPGST Act, 2017, can be sustained when the goods were accompanied by relevant transportation documents and the Department failed to establish any deliberate attempt to evade tax? 3. GROUNDS OF APPEAL 3.1. The appellant stated that the impugned Order-in-Appeal passed by the First Appellate Authority is contrary to the facts and circumstances of the case, the material available on record and the applicable provisions of the Central Goods and Services Tax Act, 2017 and the Uttar Pradesh Goods and Services Tax Act, 2017. The appellant submitted that the First Appellate Authority failed to properly appreciate the circumstances under which the validity of the e-way bill expired and erroneously upheld the penalty imposed under Section 129 of the Act. 3.2. The appellant stated that the goods were purchased from Gujarat and were being trans....
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.... deliberate attempt to evade tax are distinct matters and must be examined independently on the basis of the facts and evidence available on record. The appellant submitted that the Department had failed to establish any deliberate act, conduct or circumstance indicating an intention to evade tax. 3.7. The appellant stated that the Department had failed to discharge its burden of establishing that the appellant had any intention to evade tax. It was submitted that no independent evidence of diversion of goods, suppression of the transaction, concealment of the actual destination or deliberate non-payment of tax had been brought on record. The appellant contended that the authorities had proceeded primarily on the basis of the expiry of the e-way bill, without establishing any further circumstance demonstrating an intention to evade tax. 3.8. The appellant stated that the First Appellate Authority failed to appreciate that the goods were being transported to the declared destination and that the lapse in the validity of the e-way bill had occurred due to inadvertence and circumstances beyond the appellant's deliberate control. It was contended that the First Appellate Auth....
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.... period and closure of the office on 23.10.2025 on account of Bhai Dooj. The driver also failed to inform the appellant about the impending expiry of the e-way bill. 4.4. The appellant contended that the goods were accompanied by relevant documents and were being transported to the declared destination. No material was brought on record to establish any diversion of goods, suppression of the transaction or deliberate attempt to evade tax. 4.5. The appellant further submitted that the mere expiry of the e-way bill constitutes, at the most, a procedural lapse and cannot, by itself, establish an intention to evade tax. Reliance was placed upon judicial precedents holding that penalty cannot be imposed merely on account of expiry of an e-way bill in the absence of material indicating tax evasion. 4.6. The appellant accordingly prayed that the impugned order be set aside, the penalty of Rs. 1,57,516/- be quashed and the amount deposited be refunded or adjusted in accordance with law. 5. SUBMISSION OF THE RESPONDENT 5.1. The learned departmental representative, appearing on behalf of the Department, contested the grounds of appeal and the submissions made by the appellant.....
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.... 129 of the CGST/UPGST Act, 2017. 6.3. It is an admitted position that the goods were being transported from Gujarat to Ayodhya, Uttar Pradesh, and that the e-way bill expired on 22.10.2025 at 11:59 PM. The vehicle was intercepted on 24.10.2025 at approximately 06:00 AM near the declared ship-to address. The penalty of Rs. 1,57,516/- was imposed on account of the expiry of the e-way bill. 6.4. The distance between Ahmedabad, Gujarat, and Ayodhya, Uttar Pradesh, is approximately 1,300 km by road. The transportation of goods over such a long distance ordinarily requires considerable time. The distance and transportation period are relevant circumstances while examining the explanation furnished by the appellant regarding the delay in delivery. 6.5. The appellant has explained that the delay in transportation and non-extension of the e-way bill occurred due to inadvertence, non-availability of regular staff during the festive period, closure of the office on 23.10.2025 on account of Bhai Dooj and failure of the driver to inform the appellant about the impending expiry of the e-way bill. These explanations are required to be considered in the light of the surrounding circumsta....
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....l had expired was baseless in the facts of that case. The Court also upheld the reasoning that no intention to evade tax could be inferred merely on account of non-extension of the validity of the e-way bill. 6.12. The principle emerging from the above decision is that the expiry of an e-way bill, by itself, cannot automatically be treated as proof of an intention to evade tax when the surrounding circumstances and the material on record do not support such an inference. 6.13. Applying the aforesaid principle to the facts of the present case, it is observed that the appellant was transporting goods from Gujarat to Ayodhya, Uttar Pradesh, over a substantial distance. The e-way bill expired during the course of transportation, and the vehicle was intercepted near the declared destination. 6.14. The explanation furnished by the appellant regarding the distance involved do not establish that the appellant deliberately allowed the e-way bill to expire with an intention to evade tax. 6.15. The Department has failed to establish, by any independent evidence, that the appellant had an intention to evade tax. No material has been brought on record to demonstrate that the goods w....