The Supreme Court and various High Courts have consistently held that penalty under GST cannot be imposed mechanically for technical lapses in e-way bills when there is no intent to evade tax and the transaction is otherwise genuine.
Key judicial principles emerging from recent rulings:
Allahabad High Court
Gobind Tobacco Manufacturing Co. v. State of U.P.
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Mere expiry of e-way bill does not establish intent to evade tax.
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Detention and penalty are not justified when invoice and tax payment are genuine.
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Lockdown and similar unavoidable circumstances are valid reasons beyond the control of the trader.
Punjab & Haryana High Court
VSL Alloys (India) Pvt. Ltd. v. State of Haryana
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Penalty under Section 129 cannot be imposed merely because the e-way bill was generated by the transporter when tax documents are genuine.
Supreme Court
Assistant Commissioner v. Satyam Shivam Papers Pvt. Ltd.
(2021) 85 GST 1 (SC)
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Penalty cannot be imposed mechanically.
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Mens rea (intent to evade tax) must be established.
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This is a landmark judgment and is binding on all authorities.
Practical takeaway
Technical lapses such as expiry of e-way bill or generation of e-way bill by transporter cannot by themselves justify detention or penalty, unless intent to evade tax is clearly proved.