Expiry of e-way bill before reaching destination not intention to evade payment of tax

Expiry of e-way bill before reaching destination will not attribute to intention to evade payment of tax

In a recent case, the Allahabad High Court has reiterated that expiry of e-way bill before reaching destination due to breakdown of the vehicle will not attribute to intention to evade payment of tax.

ABCAUS Case Law Citation:
4783 (2025) (10) abcaus.in HC

In the instant case a writ petition had been filed against the impugned order(s) passed under section 129(3) of the GST Act by the GST Officials.

It was submitted that petitioner was engaged in providing vehicle tracking services to customers located across India. The petitioner is duly registered under the GST in four States.

It was further submitted that the petitioner had a contract with a Government Department for continuous supply of vehicle tracking and services. For providing the services, GPS devices were required to be delivered, for which e-way bills and tax invoices were issued.

The e-way bills were valid for 12 days from the date of its generation. While the goods were in transit, the vehicle developed a break down. Thereafter, without informing the petitioner, the driver of the vehicle tried to get it repaired, but failed. Thereafter, the driver shifted the goods in another vehicle. Due to the said exigency, the goods could not be transported within the time-line as prescribed in the e-way bill and therefore, the e-way bill expired.

It was submitted that the goods, on its journey, were intercepted on the ground that e-way bills had expired, but before passing of the seizure order, new e-way bills were generated. Thereafter, order under section 129(3) of the GST Act was passed on against which the petitioner preferred an appeal, which had been dismissed vide impugned order without considering that the vehicle developed a break down and the goods were transported in another vehicle and during the said process, the earlier e-way bill was expired, but new e-way bill was generated and therefore, there was no intention to evade payment of tax

In support of his submission, the petitioner relied upon the judgements of the Apex Court as well as Allahabad High Court.

On the other hand the Department submitted that even assuming without admitting that the earlier vehicle developed a break down, the petitioner ought to have generated a new e-way bill before the commencement of onward journey. Therefore, the petitioner had violated the provisions of the Act and the Rules and the proceedings have rightly been initiated against the petitioner.

The Hon’ble High Court noted that it was not in dispute that the goods in question were moving pursuant to the agreement entered in between the petitioner and Government Department, which tracking devices of the vehicles were to be delivered and to be maintained by the petitioner.

It was also not in dispute that the goods were accompanying with genuine tax invoice and e-way bill, but the e-way bill was expired before reaches its destination. The GST Officials had not disputed the stand taken by the petitioner that the vehicle developed a break down, which delayed the movement of goods. It was also not in dispute that the petitioner had generated a new e-way bills before passing of an order under section 129(3) of the GST Act.

The High Court observed that on various occasions, it had taken the view that expiry of e-way bill will not attribute to intention to evade payment of tax and the present case is squarely covered in the judgements.

Accordingly, it was held that the impugned orders could not be sustained in the eyes of law. The same were therefore quashed.

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