GST penalty quashed as delay in e-way bill generation was held unintentional and not indicative of tax evasion

Case Title: Truth Udyog Metal and Steel Pvt. Ltd. & Anr. v. The Deputy Commissioner of Revenue, Bureau of Investigation (South Bengal), Howrah Zone & Ors.
Court: Calcutta High Court (Civil Appellate Jurisdiction, Appellate Side)
Petition No.: M.A.T. 2311 of 2024 with I.A. No. CAN 1 of 2024
Judgment Date: 21 January 2025
Relevant Section: Section 129(1)(a) of the CGST Act, 2017
Category: Detention & Penalty — E-way Bill / Goods in Transit

Facts (Paras 1–4)

The appellant’s vehicle carrying goods was intercepted by the Bureau of Investigation (South Bengal) while proceeding to a weighbridge for weighment. The e-way bill was generated immediately after the weighment, at 6:56 p.m. on 15 June 2023. Authorities imposed a penalty under Section 129(1)(a) of the CGST Act for transporting goods without a valid e-way bill.
The appellate authority (Senior Joint Commissioner, Bally Circle) confirmed the penalty by order dated 5 October 2024. Aggrieved, the assessee filed W.P.A. 29360 of 2024, which was directed for affidavit exchange; the assessee then preferred the present intra-court appeal.

Questions before the Court

Whether the short delay in generating the e-way bill prior to interception constituted a willful attempt to evade tax warranting penalty under Section 129(1)(a) of the CGST Act.

Observations (Paras 4–6)

The Court observed that the vehicle was only en route to the weighbridge and the e-way bill was generated within an hour thereafter. There was no evidence of mala fide or willful intent to evade tax. The Court emphasized that technical or procedural delay, without fraudulent intent, cannot attract penalty under Section 129(1)(a).

Judgment (Paras 7–8)

The Calcutta High Court held that the facts did not justify imposition of penalty and consequently set aside:

• The adjudicating authority’s order dated 5 July 2023, and

• The appellate order dated 5 October 2024.

The appellant, who had already paid ₹ 1,75,716 under protest, was granted liberty to seek refund, to be processed as per law.
Result: Appeal allowed; penalty quashed; refund permitted.

Table of Cases Referred

Between Fine Lines

The ruling reiterates that mere procedural lapses, like slight delay in e-way bill generation, should not trigger harsh penalties when tax evasion intent is absent. Transporters and businesses can rely on this precedent to contest mechanical levy of penalties for technical non-compliance during genuine goods movement.

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