Trader’s Expired E-Way Bill Penalty Stands As GSTAT Rejects Breakdown Claim Not Raised At Interception

On 5 May 2022, a truck carrying goods supplied by MG Traders from Jhansi to a recipient in Alwar was intercepted. The invoice and other documents were in order, but the e-way bill had expired. MG Traders said the vehicle had broken down in transit.

The adjudicating officer imposed a penalty under Section 129(3) of the CGST/UPGST Act; the first appellate authority upheld it. The GSTAT appeal challenged that decision.

Section 129(1) of the CGST/UPGST Act and Rule 138 of the CGST Rules govern the movement of goods accompanied by a valid e-way bill; Section 129(3) provides for the resulting penalty.

The Tribunal treated the transport of goods on an expired e-way bill as transport without an e-way bill for the purposes of Section 129(1).

It also relied on Union of India v. Dharmendra Textile Processors, applying the principle that mens rea is not an essential element of a statutory civil penalty unless the legislation requires it.

The Tribunal further referred to authorities concerning incomplete or incorrect e-way bills and the evidential significance of surrounding circumstances.

The Tribunal accepted that the invoice, goods description, and quantities matched, but found the breakdown explanation unsubstantiated: the repair slips were produced only during adjudication, and the driver had not reported the breakdown when questioned at interception.

It distinguished the taxpayer’s cited cases, which concerned different e-way-bill defects or supported breakdown evidence, and found them inapplicable.

Considering the expired e-way bill and the surrounding circumstances, the Tribunal concluded that the goods were being transported without a valid e-way bill. It therefore found a violation of Section 129(1) read with Rule 138 attracting the penalty under Section 129(3).

The Tribunal dismissed the second appeal, and upheld the findings of the adjudicating officer and the first appellate authority.