Allahabad HC: No GST Penalty When Multi-Vehicle Dispatch Clearly Disclosed in E-Way Bill

The petitioner, a manufacturer transporting a sorter machine from Greater Noida to Bengaluru, loaded it in two trucks because the consignment could not physically fit in a single vehicle. All requisite documents, including the tax invoice, railway receipt, and e-way bill, accompanied the goods, the authorities seized the consignment on the allegation that proper documents were not produced and proceeded to impose a penalty under Section 129(3).

The seizure order was upheld in appeal, compelling the petitioner to approach the High Court.

Core Issue: Whether a penalty under Section 129(3) can be sustained when the e-way bill expressly mentions multi-vehicle transportation along with both truck numbers and all disclosures match the goods in transit.

HC Ruled: The Court noted that the goods were supported by all required documents and that the e-way bill itself disclosed multi-vehicle usage and both truck numbers carrying the consignment. It was observed that the petitioner’s explanation, that a sorter machine could not fit into one truck, was natural, undisputed, and consistent with the documents. Once true and correct disclosure existed, the Court held, no intention to evade tax could be inferred.

Relying on Zhuzoor Infratech Private Limited, Shyam Sel & Power Limited, and the Supreme Court’s ruling in Satyam Shivam Papers Pvt. Ltd., the Court found that the seizure and penalty lacked legal foundation. Since the authorities acted despite full disclosure in the e-way bill, the impugned orders dated 31.07.2019 were quashed.

Thus, the writ petition was allowed.

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