High Court Quashes GST Penalty; E-Way Bill Part B Lapse Linked to Technical Glitch

Allahabad High Court quashed a GST penalty order issued on the grounds that the company did not furnish Part B of the e-way bill. The court accepted it was a technical issue, not an intention of tax evasion, set aside all the impugned orders, and ordered the GST department to refund any amount deposited by the company during the proceedings.

The present appeal was filed by a company named Agrim Wholesale Private Limited before the Allahabad High Court, challenging orders passed on July 29, 2025, and May 03, 2025. The appellant is a registered company under the GST Act, having GSTIN 09AATCA4488Q1ZG. The company claimed that its business goods were confiscated on May 02, 2025, on the grounds that Part B of the E-way bill accompanying the goods was not generated, resulting in the GST department issuing a penalty order against the company, which has been dismissed by the impugned order passed on July 29, 2025.

The company argued that at the time of seizure of the vehicle in question, all requested documents were produced before the GST officials, and the goods were found as per the description mentioned in the tax invoice. Additionally, while issuing the GST order, the department did not give any reason. The company further claimed that Part B of the e-way bill was unfilled due to technical glitches; there was no intention to evade tax. Except for Part B of the e-way bill, all the other documents were properly filled out. To support its claims, the company also cited several earlier judgments, such as the present court’s ruling in M/s Citykart Retail Private Limited vs. the CCT & Another and M/s Roli Enterprises vs. State of U.P. & Others, and many others.

When the court heard the arguments of both sides and found the penalty imposed on the basis of non-filing of Part B of the e-way bill was not fair, as there was no genuine intention to evade tax, the company could not, indeed, file Part B of the e-way bill due to a technical glitch. The records uncover that due to a technical error, Part B of the e-way bill could not be filled, which has not been disputed at any stage. Citing several earlier decisions, the court set aside the penalty imposed under section 129(3) of the GST Act and quashed both the challenged orders. Meaning, the appeal had been allowed. The concerned authority has been directed to refund any amount deposited by the company during proceedings.