MOVEMENT WITHOUT E-WAY BILL FATAL; TRANSPORTER'S ERROR NO DEFENSE

MOVEMENT WITHOUT E-WAY BILL FATAL; TRANSPORTER’S ERROR NO DEFENSE

ISSUE

Whether the detention and seizure of goods under Section 129 are justified when the goods are intercepted without a valid E-way bill, even if the taxpayer claims the transporter moved the goods contrary to instructions and the E-way bill was generated immediately after interception due to technical glitches.

FACTS

The Shipment: The petitioner, a registered trader in water purifiers, issued multiple tax invoices for a shipment. Due to the aggregate value, an E-way bill was mandatory.
The Defense: The petitioner claimed they specifically instructed the transporter not to commence movement until the E-way bill was generated. They cited technical glitches for the delay in generation.
The Violation: Disregarding the instruction (allegedly), the transporter dispatched the vehicle.
The Interception: The Mobile Squad intercepted the vehicle in transit. Upon verification, the driver produced tax invoices but no E-way bill.
The Seizure: The authorities seized the goods for violation of Section 68 read with Rule 138. The petitioner generated and produced the E-way bill only after the interception took place.

DECISION

Mandatory Requirement: The Court reiterated that under Section 68 and Rule 138, the E-way bill must be generated before the commencement of movement of goods.
Undisputed Default: It was an admitted fact that at the time of interception, no E-way bill existed.
Post-Interception Cure Invalid: Generating the E-way bill after the vehicle has been intercepted does not cure the illegality of the transport. If this were allowed, every evader would generate a bill only when caught.
Transporter’s Fault is No Excuse: The plea that the transporter moved the goods against instructions does not absolve the taxpayer of liability under the GST Act. The proper remedy for the taxpayer is to seek damages from the transporter, not relief from the tax department.
Ruling: The detention order under Section 129(3) was upheld as lawful. The writ petition was dismissed.

KEY TAKEAWAYS

Zero Tolerance on E-way Bills: Courts are increasingly strict about E-way bills. “Technical glitches” or “Transporter error” are rarely accepted as valid defenses once the goods are caught in transit without the document.

Control Your Logistics: As a consignor, you are liable for the goods until delivery. If your transporter moves goods without your green signal (the E-way bill), you pay the penalty (200% of tax). Ensure strict contracts with transporters to recover these penalties from them if they are at fault.

HIGH COURT OF ALLAHABAD

Birds RO System (P.) Ltd.

State of U.P.

Piyush Agrawal, J.

WRIT TAX No. 987 of 2024

NOVEMBER 17, 2025

Vishnu Kesarwani for the Petitioner. Ravi Shankar Pandey for the Respondent.

ORDER

1. Heard Shri Vishnu Kesarwani, learned counsel for the petitioner and Shri Ravi Shankar Pandey, learned ACSC for the State-respondents.

2. The instant writ petition has been filed against the impugned order dated 29.03.2023 passed by the Additional Commissioner, Grade -II, (Appeals), State Tax, Sonbhadra.

3. Learned counsel for the petitioner submits that the petitioner is a Private Limited Company and registered under the GST Act. The petitioner is engaged in the business of wholesale and retail trading of water purifier/RO/RO+UV system and parts thereof. He further submits that on the basis of the order received from the purchasing dealer, the petitioner issued a tax invoice dated 15.12.2021 in favour of M/s Birds Aqua Service, Rewa and charged GST of Rs. 7397.10. The said bill was sent to the transporter for transporting. On the next date, further new orders were received, to which tax invoices were raised, where the tax was also charged accordingly. Since in three tax invoices, the value exceeded the amount of Rs. 50,000/-, which required e-way bill, the petitioner informed the transporter not to dispatch the goods unless & until e-way bill is generated and handed over. However, the transporter, without intimating the petitioner, loaded the goods in vehicle no. UP 65 FT 8974 and send the goods. The Mobile Squad, headed by the Assistant Commissioner, intercepted the goods and at the time of interception of the goods, only tax invoice was there without there being any e-way bill. On the said premise, the goods were seized. He further submits that on the basis of three tax invoices, the physical verification was undertaken and thereafter, the seizure order was passed on the ground that the goods were being transported without there being e-way bill.

4. Learned counsel for the petitioner further submits that the petitioner has no intention to evade payment of tax as he instructed the transporter for no journey should be started without e-way bill and the e-way bill could not be generated due to technical glitch on the server, but still not satisfied with the same, the order under section 129(3) of the GST Act was passed, against which the petitioner preferred appeal, which has been dismissed by the impugned order without considering the material on record.

5. Learned counsel for the petitioner further submits that the petitioner is a registered dealer and is submitting its return and paying all requisite tax. There is no element of evasion of tax and therefore, the impugned orders are bad in law.

6. Per contra, learned ACSC supports the impugned orders and submits that at the time of interception, the transporter failed to produce the e-way bill. Once the e-way bill has not been produced, the intention to evade payment of tax is established. In support of his submissions, he has placed reliance on the judgement of this Court in Aysha Builders & Suppliers v. State of U.P. [WRIT TAX No. 2415 of 2024, dated 24-1-2025] and Mohini Traders v. State of U.P.(Allahabad).

7. After hearing learned counsel for the parties, the Court has perused the record.

8. It is not in dispute that the goods were intercepted and seized on the ground of non-availability of the e-way bill. Once the e-way bill was not shown or generated before commencement of journey, the impugned order is justified. The Division Bench of this Court in Aysha Builders & Suppliers (supra) has specifically held that if the e-way bill is not produced before the detention/seizure order, the proceedings are justified. The relevant paragraph is reproduced as under:-

“8. So far as reliance placed on judgment in Axpress Logistics India Pvt. Ltd (supra) is concerned, the said case, apparently, has no application, inasmuch as in the said case, the Court has noticed that the e-way bill under the U.P. GST Act was downloaded by the petitioner therein much before the detention and seizure of the goods and the vehicle and in the present case, admittedly, the e-way bill has been downloaded post detention and seizure of the goods and the vehicle.”

9. Following the said judgement, this Court in Mohini Traders (supra) has held that in absence of e-way bill, the seizure proceeding is justified.

10. The record of the case shows that the e-way bill was not produced and the same was produced later on the date of detention, physical inspection and passing of the seizure order. It is not in dispute that the e-way bill was not generated immediately after the movement of goods, but the same was generated much after the interception of the goods and therefore, the issue in hand is squarely covered by the judgements in Aysha Builders & Suppliers (supra) and Mohini Traders (supra).

11. In view of the aforesaid facts & circumstances of the case, no interference is called for in the present case.

12. The writ petition fails and is dismissed.