E-Way Bill Part B Missing? No Penalty Without Proof of Tax Evasion, Rules Allahabad HC

The Hon'ble High Court of Allahabad in Fiserv Merchant Solutions (P.) Ltd. v. State of UP, WRIT TAX NO. 1774 OF 2025 dated April 30, 2025 held that mere non-filling of part-B of e-way bill would not attract penalty under section 129 unless an attempt was made to evade tax and a finding in this regard was recorded.

Facts of the Case

The Petitioner, Fiserv Merchant Solutions (P.) Ltd., was transporting goods when they were stopped at U.P. Gate, Ghaziabad. Upon inspection, it was found that although the e-way bill was being carried, the part-B of the same was not filled up. Based on this, a notice was issued to the Petitioner.

Though the Petitioner appeared before the authority, no response was filed. The State Tax Officer, Ghaziabad, concluded that as the movement of goods was without filling up part-B of the e-way bill, it was not valid in view of violation of provisions of Rule 138 of the G.S.T. Rules 2017. Consequently, the authority imposed a penalty under Section 129(3) of the U.P. G.S.T. Act, 2017 vide order dated January 20, 2025.

Aggrieved by this order, the Petitioner filed a writ petition before the Allahabad High Court challenging the penalty order passed by the State Tax Officer, Ghaziabad.

Issue

Whether mere non-filling of part-B of e-way bill would attract penalty under Section 129 of the GST Act without any finding regarding an attempt to evade tax?

Held by the Court

The Hon'ble High Court of Allahabad in WRIT TAX NO. 1774 OF 2025 held that:

The Court carefully examined the order passed by the State Tax Officer, Ghaziabad, and found that except for noticing violation of provisions of Rule 138 on account of non-filling up of part-B of e-way bill, not a word had been indicated pertaining to any attempt to evade tax.

The Court observed that the non-filling of part-B of the e-way bill is only a technical breach, and there was no intention to evade tax found by the authority. The Court emphasized that no finding regarding any attempt to evade tax had been recorded by the authority.

The Court relied on a series of orders previously passed by the Allahabad High Court, particularly the judgment in Precision Tools India v. State of U.P. (Writ-Tax No. 415 of 2023 decided on January 29, 2024), which laid down that unless an attempt is made to evade tax and a finding in this regard is recorded, mere non-filling of part-B of e-way bill would not attract penalty under Section 129 of the Act.

The Court held that the order passed by the respondent authority could not be sustained, as it failed to establish any intention or attempt by the Petitioner to evade tax. Consequently, the Court allowed the petition and set aside the order dated January 20, 2025, passed by the State Tax Officer, Ghaziabad.

The Court also directed that the amount of penalty that had been deposited by the Petitioner under protest shall be refunded within a period of three weeks from the date of the order.

Relevant Sections

"Section 129 of CGST Act, 2017/Uttar Pradesh GST Act, 2017" "Rule 138 of CGST Rules, 2017"

Cases Referred

Precision Tools India v. State of U.P. (Writ-Tax No. 415 of 2023 decided on January 29, 2024)

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