2025 (7) TMI 1622 - HC - GST

Levy of penalty u/s 129(3) of the GST Act - non-filling of Part -B of the e-way bill - intent to evade tax present or not - HELD THAT - The record shows that the stand of the petitioner was that due to technical glitch Part - B of the e-way fill could not be filled but there was no intention to evade payment of tax as well as none of the authorities below has recorded any finding with regard to intention to evade payment of tax. The Division Bench of this Court in M/s Tata Hitachi Construction Machinery Company Private Limited 2025 (5) TMI 770 - ALLAHABAD HIGH COURT has categorically held that non-filling of e-way bill will not attract penalty under section 129(3) of the GST Act. The same view has been reiterated by this Court in M/s Citykart Retail Private Limited 2022 (9) TMI 374 - ALLAHABAD HIGH COURT and M/s Roli Enterprises 2024 (1) TMI 813 - ALLAHABAD HIGH COURT . Further the record reveals that due to technical error Part - B of the e-way bill could not be filled which has not been disputed at any stage. In the light of the aforesaid facts there was no intention of the petitioner to evade payment of tax which would amount to levy of penalty under section 129(3) of the GST Act. The impugned order is set aside - petition allowed.

Summary

ISSUES:

Whether penalty under section 129(3) of the GST Act can be imposed for non-filling of Part-B of the e-way bill due to a technical glitch.Whether the absence of intention to evade payment of tax affects the imposition of penalty under section 129(3) of the GST Act.Whether the authorities are required to record a finding of intention to evade tax before imposing penalty under section 129(3) of the GST Act.

RULINGS / HOLDINGS:

The court held that "non-filling of e-way bill will not attract penalty under section 129(3) of the GST Act" where the non-filling is due to a technical glitch and there is no intention to evade payment of tax.The absence of any recorded finding by the authorities regarding intention to evade tax precludes the imposition of penalty under section 129(3) of the GST Act.The impugned penalty orders under section 129(3) of the GST Act were quashed as the petitioner's failure to fill Part-B of the e-way bill was caused by a technical error and there was no evidence of tax evasion.

RATIONALE:

The court applied the statutory framework under section 129(3) of the GST Act, which authorizes penalty for contravention related to e-way bills but requires consideration of intent to evade tax.The court relied on precedent from the Division Bench ruling in M/s Tata Hitachi Construction Machinery Company Private Limited and subsequent judgments in M/s Citykart Retail Private Limited and M/s Roli Enterprises, which established that mere non-filling of e-way bill without intent does not attract penalty.The court emphasized the necessity of a recorded finding of tax evasion intention by the authorities before imposing penalties under section 129(3), marking a consistent doctrinal approach against penalizing technical or inadvertent non-compliance.