Empty Part-B of E-Way Bill Due to Technical Glitch Does Not Attract Section 129 Penalty in Absence of Intent to Evade Tax
ISSUE
Whether a penalty under Section 129(3) of the CGST Act can be imposed for the non-generation of Part-B of the E-way bill (vehicle details) when the omission was caused by a technical glitch, and all other accompanying documents (Invoice, Part-A) were found to be in order without any discrepancy in the goods.
FACTS
The Interception: The goods and conveyance were intercepted and seized by the roving squad.
The Defect: The sole ground for detention was that Part-B of the E-way bill accompanying the goods was not generated/filled.
The Compliance: At the time of interception, the driver produced all requisite documents (Tax Invoice, E-way Bill Part-A). The goods physically found in the vehicle matched the description and quantity mentioned in the invoice perfectly.
The Defense: The petitioner argued that Part-B could not be updated due to a technical glitch on the portal/device at the time of commencement of movement. They asserted there was absolutely no intention to evade tax as the transaction was fully documented.
The Orders: The Adjudicating Authority levied a penalty, and the Appellate Authority dismissed the appeal, confirming the penalty.
HELD
No Intent to Evade: The High Court observed that the authorities below had failed to record any specific finding regarding an “intention to evade payment of tax.”
Technical Breach: The Court held that the non-filling of Part-B due to a technical difficulty is a procedural lapse. When the invoice and goods match, and the transaction is genuine, a mere technical error cannot be equated with evasion.
Precedent: Relying on the principle that penalty under Section 129 requires a mens rea (intent) to evade tax (a position often taken by Allahabad/Telangana HCs in similar matters), the Court ruled that penalty is not automatic for every clerical/technical error.
Remedy: The impugned penalty orders were quashed.
Verdict: [In Favour of Assessee]
KEY TAKEAWAYS
Part-B is Procedural: While Part-B is mandatory for movement, Courts are increasingly holding that if Part-A and the Invoice are valid and the goods match, the omission of Part-B (especially due to GPS/portal issues) is a “minor breach” or “technical error” not warranting the severe 200% penalty.
Burden of Proof: The Department must prove “Intent to Evade.” If the goods are traveling on a valid invoice with tax paid/payable, and the route is logical, proving evasion just because a vehicle number is missing is difficult for the Revenue.
Circular 64/2018: Always cite CBIC Circular No. 64/38/2018-GST, which prescribes a nominal penalty (Rs. 500/1000) for minor errors like spelling mistakes in vehicle numbers, rather than the full detention penalty.