GST Tribunal Restores ₹2.7 Lakh Penalty on Paint Trader Over Expired E-Way Bill, Missing Vehicle Details

On 19 July 2023, vehicle No. UP78HN8510 was intercepted while carrying paint consignments from Kanpur to Raebareli.

The e-way bills for Tax Invoice Nos. 1826 and 1827 did not contain updated Part-B vehicle details, and the e-way bill for Tax Invoice No. 1718 had expired.

The proper officer imposed a penalty of ₹2,70,444 under Section 129(3) of the CGST/UPGST Act, 2017.

The First Appellate Authority set the penalty aside, treating the e-way-bill defects as technical lapses and finding no intention to evade tax.

The Revenue appealed under Section 112.

Section 68 of the CGST/UPGST Act, 2017, read with Rule 138 of the CGST/UPGST Rules, 2017, requires compliance with the prescribed e-way-bill requirements during the movement of goods.

Section 129(3) provides for penalty in connection with goods and conveyances detained or seized under Section 129.

The Tribunal treated non-compliance with the e-way-bill requirements at the time of interception as a statutory contravention; subsequent correction or tax disclosure does not undo that contravention.

At interception, two e-way bills lacked updated Part-B vehicle details and another had expired.

The Tribunal found that the respondent had not established a valid reason for the delay, the failure to update Part-B, or the e-way-bill expiry.

It held that the later updating of vehicle details and reporting of the transactions in GSTR-1 did not cure the non-compliance existing when the goods were intercepted.

Accordingly, the First Appellate Authority erred in treating the breaches as merely technical and in setting aside the penalty on the basis that there was no intention to evade tax.

The penalty of ₹2,70,444—comprising CGST of ₹1,35,222 and SGST of ₹1,35,222—under Section 129(3) was upheld.