Allahabad HC Quashes GST Penalty: “Missing Part-B of E-Way Bill Isn’t Tax Evasion”

The petitioner, a proprietorship firm engaged in manufacturing Gabion boxes and registered under GST, faced the interception of its goods on 26.12.2024 solely because Part B of the e-way bill was not generated. All other documents, including the tax invoice and accompanying papers, were produced and matched the goods in transit. Despite explaining that the non-filling of Part B resulted from a technical glitch, the authorities imposed a penalty under Section 129(3), and the appellate authority upheld it on 19.04.2025.

Aggrieved, the petitioner invoked writ jurisdiction, holding that mere non-filing of Part B, without intent to evade tax, cannot attract a penalty.

Issue Raised: Whether a penalty under Section 129(3) of the GST Act can be sustained when the only lapse is non-filling of Part-B of the e-way bill and the authorities record no intention to evade tax.

HC’s Ruling: The Court found that neither the intercepting authority nor the appellate authority recorded even a whisper suggesting that the petitioner intended to evade tax. The goods matched the invoice, all documents were otherwise in order, and the only lapse was a technical failure in generating Part B of the e-way bill. The Court emphasized that, as per Tata Hitachi Construction Machinery Co. Pvt. Ltd., non-filling of Part B by itself does not justify imposition of penalty under Section 129(3).

The Court held that the orders were unsustainable. Both orders were quashed. The writ petition was allowed, and the authorities were directed to refund any amount deposited during the proceedings within two months of receiving the certified order.

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