Mens Rea is Not Required to Impose Section 129 Penalties for Transporting Goods with Expired E-Way Bills

By | October 28, 2026
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Mens Rea is Not Required to Impose Section 129 Penalties for Transporting Goods with Expired E-Way Bills

Issue

  • Whether proof of mens rea (intention to evade tax) is a mandatory precondition for imposing a penalty under Section 129 of the CGST/CGST Act for transporting goods with expired e-way bills.
  • Whether the detention of goods and imposition of 200% penalty are legally sustainable when e-way bills expired six days prior to interception without any attempt to seek an extension or provide valid justification.

Facts

  • Transport & Interception: The appellant, a logistics entity, transported two consignments that were intercepted in transit on September 20, 2024.
  • Expired E-Way Bills: The accompanying e-way bills had expired on September 14, 2024 (six days prior to interception).
  • Absence of Justification: No extension of validity was sought within the statutory window, no repair bills or breakdown evidence were produced, and neither the supplier, recipient, nor transporter attempted re-validation despite vehicles being near their destination.
  • Defense Raised: The appellant argued that the movements were inter-state stock transfers between own registrations and invoked CBIC Circular No. 64/38/2018-GST, while also claiming an absence of mens rea or intent to evade tax.
  • Proceedings: Penalties equal to 200% of the tax were paid for the release of goods and vehicles. First appeals were dismissed, leading to further appeals before the Tribunal.

Decision

  • Inapplicability of Mens Rea Requirement: Taxing statutes require strict construction; Section 129 does not stipulate an intent to evade tax as a precondition for civil contraventions, unlike confiscation provisions.
  • Irrelevance of Stock-Transfer Status: The inter-state stock transfer character of the movement does not exempt taxpayers from complying with mandatory e-way bill validation rules.
  • Non-Application of Circular Exceptions: CBIC Circular No. 64/38/2018-GST applies only where a valid e-way bill accompanies the consignment; it does not protect shipments moving with long-expired documents.
  • Sustaining the Penalty: The six-day expiry, lack of extension attempts, and absence of corroborative evidence established a clear breach of Rule 138, validating the imposition of penalties under Section 129. Appeals were rejected in favor of the Revenue.

Key Takeaways

  • Strict Liability for Civil Contraventions: Proof of fraudulent intent or mens rea is not required to invoke detention-and-penalty provisions under Section 129 once a technical or procedural breach (such as an expired e-way bill) is established.
  • Mandatory Compliance with E-Way Bill Validity: Taxpayers and transporters must renew or extend e-way bill validity within statutory timelines; moving goods with expired documents attracts automatic detention and penalty risks.
  • Stock Transfers Are Not Exempt: Internal stock transfers between distinct registrations are fully subject to e-way bill and documentation rules, and non-compliance cannot be excused by claiming a lack of commercial sale.
GOODS AND SERVICE TAX APPELLATE TRIBUNAL , RAIPUR BENCH
Asat Logistics (P.) Ltd.
v.
c
Pradeep Kumar Vyas, Judicial Member
and Chandra Bhushan Singh, Technical Member
APL/117/RPR/2026
OCTOBER  13, 2026
Circulars & Notifications: Circular No. 64/38/2018-GST, dated: 14.09.2018; Circular no. 41/15/2018-GST, dated: 13.4.2018
CASE REVIEW
Bhishm Ahluwalia, Ms. Simran Dhaner and Prateek Pandey, Advs. for the Appellant. Abhay Tiwari, Adv. for the Respondent.
ORDER
Pradeep Kumar Vyas, Judicial Member.- These appeals have been preferred under Section-112(1) of the Central Goods and Services Tax Act, 2017 and Chhattisgarh Goods & Service Tax Act, 2017 read with section 20 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the “GST Act, 2017”) against the orders dated 13.01.2026 passed by the Appellate Authority and Joint Commissioner (Appeal), State Tax, Raipur, in First Appeal No. 1009/GST/e-way Bill/2026 and 1008/GST/e-way Bill/2026 in the cases of M/s Asat Logistics Private Limited Bhatapara (C.G.), whereby the appeal were dismissed.
2. The brief facts of the appeal no-117 are that Asst. Commissioner state tax Sarguja circle-Ambikapur, was checking vehicles. He checked vehicle no.-RJ-47 GA 5092 on 20.09.2024 at. 2.10 PM at Banaras Road, Songara. He found that the goods were transporting with e-way bills which was expired. Then Asst. Commissioner issued necessary notices/orders in prescribed GST forms and imposed penalty of 200% of the amount of IGST as Rs. 1,81,208/-. The demand order has been issued. The penalty was paid therefore, vehicles with goods were released.
3. The brief facts of the appeal no-118 are that Asst. Commissioner state tax Sarguja circle- Ambikapur, was checking vehicles. He checked vehicle no.-RJ-47 GA 4307 on 20.09.2024 at. 12.05 PM at Banaras Road, Songara. He found that the goods were transporting with e-way bills which was expired. Then Asst. Commissioner issued necessary notices/orders in prescribed GST forms and imposed penalty of 200% of the amount of IGST as Rs. 2,47,680/-. The demand order has been issued. The penalty was paid therefore, vehicles with goods were released.
Aggrieved by the aforesaid orders, the appellant preferred first appeals, which were dismissed as stated above.
4. The main grounds of Both the appeals are that the Ld. appellate authority failed to address all submissions made by appellant during personal hearing. The ld. appellate authority erred in maintaining the imposition of penalty being twice the amount of tax as a penalty U/s129(1)(a) GST Act, solely of ground of expire of e-way bills. E-way bills were expired due to vehicles break down. There was no finding of evasion of tax. When the tax officer inspected the vehicles at that time driver produced GST invoices and e-way bills. The e-way bills were expired due to breakdown of vehicles. The impugned orders in appeals are non-speaking and mechanical. The ld. appellate authority did not record the reason and did not comply the section-107(12) GST Act. According to appellants they sent the goods from their one unit to the same company in another state on stock transfer basis, therefore, section-129 GST Act, is not applied in absence of evasion of tax. The in charge of vehicles had all prescribed documents and they produced the same before the inspecting authority. Only e-way bills were expired due to break down of vehicles. The appellant mentioned the CBIC Circular no-64 dt. 14.09.2018 in his grounds of appeals. According to that circular the proceeding u/s-129 GST Act, cannot be initiated. This circular is binding upon the revenue. The assessing officer as well as appellate authority did not follow the principles of natural justice, they did not give the opportunity of being heard to appellants. Appeal deserves to be allowed according to appellant.
The appellants pleaded citations in favour of their grounds of appeal. If we find necessary, we will discuss it in proper place in this order.
5. The respondent, in his detailed reply, denied the material facts and grounds of appeal raised by the appellant. The respondent specifically denied the contention that the impugned order is a non-speaking order, submitting that the same is a reasoned and speaking order. The Appellate Authority duly examined the applicability of the third and fourth provisos to Rule 138 of the CGST Rules, 2017. The judgments relied upon by the appellant were found to be distinguishable on facts and, therefore, were not applicable to the present case. The appellants seek to take advantage of the fact that the movement of goods was by way of stock transfer between registrations belonging to the same legal entity. However, under Section 25 of the CGST Act, 2017, read with Schedule I thereto, separate registrations of the same legal entity are treated as distinct persons. Consequently, any movement or supply of goods between such distinct persons constitutes a taxable supply and is required to comply with the provisions of Section 68 of the CGST Act, 2017 and Rule 138 of the CGST Rules, 2017. In the present case, the e-way bills were valid only up to 14.09.2024, whereas the vehicle carrying the goods were intercepted on 20.09.2024, i.e., six days after the expiry of the validity of the e-way bills. The appellant failed to comply with the provisions of Rule 138(10) of the CGST Rules, 2017. The judgments relied upon by the appellant are factually distinguishable and do not advance the appellant’s case. Section 129 of the CGST Act, 2017 operates upon the objective fact of transportation of goods in contravention of the provisions of the Act or the Rules. The invocation of Section 129 does not require the department to establish actual evasion of tax as a condition precedent. Once the transportation of goods is found to have taken place in contravention of the statutory requirements, the provisions of Section 129 are attracted. The respondent further submitted that Circular No. 64/38/2018-GST dated 14.09.2018 is not applicable to the facts of the present case. The circumstances contemplated in the said Circular are materially different from those involved herein, and the case of transportation under an expired e-way bill is not covered by the said Circular. The respondent also denied the allegation of violation of the principles of natural justice. It was submitted that the appellant was afforded a full and effective opportunity of hearing before the Appellate Authority and was duly permitted to present its case. Therefore, the contention that the impugned proceedings were conducted in violation of the principles of natural justice is wholly untenable. The appellant also failed to substantiate its plea regarding the alleged breakdown of the vehicle by producing any cogent or documentary evidence in support thereof. Mere assertion of vehicle breakdown, without any supporting documentary evidence, cannot constitute a valid justification for the expiry of the e-way bill. The respondent further submitted that the appellant is a company engaged in the business of transportation of goods by road and, being a professional logistics operator, is expected to exercise a high degree of diligence in ensuring that the e-way bills accompanying the consignments remain valid throughout the course of transportation. The plea that the lapse occurred due to the “lack of knowledge or oversight of an employee” cannot absolve the appellant of its statutory responsibility to ensure compliance with the provisions of the CGST Act and the Rules made thereunder. In view of the aforesaid facts and circumstances, the proper officer rightly invoked the provisions of Section 129(1)(a) of the CGST Act, 2017 and imposed the applicable penalty. The appellant was afforded a full and effective opportunity of being heard before the Appellate Authority, and no prejudice has been demonstrated on account of any alleged denial of natural justice.
Accordingly, the respondent submitted that the grounds raised by the appellant are devoid of merit and that the appeal deserves to be dismiss.
6. The argument of the learned C.A. appearing on behalf of the appellant is that section 129 (4) of GST Act was not complied with and Circular no. 41/15/2018 GST dated 12.04.20218 also was not followed by the Tax Officer. MOV-01 and the Order were passed on the same date i.e. 20.09.2024. There should be proof of intent to evade tax for imposing penalty under section 129 of GST Act. Period between expiry of e way bill and inspection of vehicle is not material. He has highlight following citations; –
1. Asstt. Commissioner (ST) v. Satyam Shivam Papers (P.) Ltd.  90 GST 479/57 GSTL 97 (SC)/2022 (1) TMI 954 SC.
2. Satyam Shivam Papers (P.) Ltd. v. Asstt. CST  50 GSTL 459 (Telangana)/2021 (6) TMI 378 Telangana HC.
3. Maa Amba Builders v. Asstt. Commissioner of Revenue, State Tax, Bureaun of Investigation North Bengal   660 (Calcutta)/2024 (10) TMI 363 Calcutta HC.
4. Podaran Foods India (P.) Ltd. v. State of Kerala  50 GSTL 412 (Kerala)/2024 (1) TMI 552 Kerala H.C.
5. T.P. Metals & Roofings v. Asstt. Tax Officer (INT) Malappuram 2024 (10) TMI 1239 Kerala HC
7. The argument of the learned authorized representative appearing on behalf of the respondent is that Appellants did not extend e way bills within 8 hours. Appellants did not take any action up to 6 days. The breach of section 129 GST Act and rule 138 are very clear. Intent to evade tax is not necessary for this provision. Appeals deserved to be dismissed.
8. Question of Law involved in the appeal is:
1. Whether proof of or facts, circumstances or some material which shows intent to evade tax are must be on the record for invoking the provision of penalty U/s-129(1)(a) GST Act, or/ and imposing penalty under this provision?
REASONS OF CONCLUSION
On question of law
9. The learned advocate appearing on behalf of appellants argued that there should be evidence regarding evasion of tax otherwise provision of section 129 cannot be invoked. He produced above citations on these points.
10. we considered above arguments. In case of Patanjali Ayurved Ltd. v. Union of India  99 GSTL 7 (Allahabad)/(2025) 54 GSTJ 596 (All) division bench of Hon’ble Allahabad High Court in para 26 held that; –
26. Upon sifting through the various judgments quoted above, one may pen down the salient rules to be applied for interpretation of all statutes especially taxing statutes:
(a) A statute is designed to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable.
(b) In a taxing Act one has to look merely at what is clearly said. There is no room for intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in; nothing is to be implied. One can only look fairly at the language used. A taxing statute, if it professes to impose a charge, its intention must be expressed in clear, unequivocal and unambiguous language. The charging section is to be construed strictly regardless of its consequences that may appear to the judicial mind.
(c) However, in construing the machinery provisions for assessment and collection of the tax to make the machinery workable ut res valeat potius quam pereat, that is, the court should avoid construction that would defeat the purpose of Legislature behind enacting the particular legislation on the presumption that it was to bring about an effective result.
(d) Even while applying the strict rules of interpretation, the court may interpret the construction of a provision in a harmonious manner by reading all the provisions together to gather the intention from the language employed, its context, and give effect to the intention of the Legislature.
Ingenious attempt to avoid tax is to be thwarted. The Supreme Court in State of Tamil Nadu v. M.K. Kandaswani (1975) 4 SCC 745/(1975) 36 STC 191 (SC); 1975 SCC (Tax) 402 has categorically stated that where a particular section is a charging as well as a remedial provision, its main object is to plug leakage and prevent evasion of tax and in such circumstances in interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute book, should be eschewed.
11. The Supreme Court in case of CCE, Chandigarh v. Doaba Steel Rolling Mills   (SC)/2011 Vol-7 Supreme Court Reports 934 has observed that a taxing statute should be strictly construed. It has also observed that the intention of the legislature is primarily to be gathered from the words used in the statute and once it is shown that the assesses falls within the letter of the law, he must be taxed howsoever great the hardship may appear to the judicial mind to be.
12. Section-129(1) of GST Act, is as under: –
Section- 129(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act, or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, –
(a) On payment of penalty equal to two hundred per cent, of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent, of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty:
(b) On payment of penalty equal to fifty per cent of the value of the goods or two hundred per cent, of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent, of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty:]
(c) Upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without serving and order of detention or seizure on the person transporting the goods.
13. If we consider and interpret the section 129 (1) of GST Act, in the light of above rules of interpretation of taxing statute, we find that it is not mentioned in this section that the intent to evade tax is mandatory for invoking of this provision or imposing penalty under this section as mention in section 130 (1) (4) of GST Act.
14. So far as the mens ara is concerned in case of SEBI v. Cabot International Capital Corporation [2005] 123 COMP CASE 841/[2004] 2 COMP. LJ 363/51 SCL 307 (Bombay)/ (2004) SCC Online Bombay 180 Division Bench of Hon’ble Bombay High Court held as under: –
47. Thus, the following extracted principles are summarised.
(A) Mens rea is an essential or sine qua non for criminal offence.
(B) A straitjacket formula of mens rea cannot be blindly followed in each and every case. The scheme of a particular statute may be diluted in a given case.
(C) If, from the scheme, object and words used in the statute, it appears that the proceedings for imposition of the penalty are adjudicatory in nature, in contradistinction to criminal or quasi-criminal proceedings, the determination is of the breach of the civil obligation by the offender. The word “penalty” by itself will not be determinative to conclude the nature of proceedings being criminal or quasi-criminal. The relevant considerations being the nature of the functions being discharged by the authority and the determination of the liability of the contravenor and the delinquency.
(D) Mens rea is not essential element for imposing penalty for breach of civil obligations or liabilities.
(E) There can be two distinct liabilities, civil and criminal, under the same Act.
(F) Even the administrative authority empowered by the Act to “adjudicate” have to act judicially and follow the principles of natural justice, to the extent applicable.
(G) Though looking to the provisions of the statute, the delinquency of the defaulter may itself expose him to the penalty provision yet despite, that in the statute minimum penalty is prescribed, the authority may refuse to impose penalty for justifiable reasons like the default occurred due to bona fide belief that he was not liable to act in the manner prescribed by the statute or there was too technical or venial breach etc.
15. In case of Asian Switchgear (P.) Ltd. v. State Tax Officer  79 GSTL 417 (Calcutta)/(2024) 123 GSTR 175: 2023 SCC OnLine Cal 4760 : division bench of Hon’ble Calcutta High Court held in para 27 as under; –
27. Relevancy of motive in respect of imposition of tax liability to the extent that it results in civil liability has been examined by the Supreme Court in SEBI v. Shriram Mutual Fund [2006] 68 SCL 216/ 5 COMP. LJ 30/131 COMP CASE 591 (SC); (2006) 5 SCC 361 .] , Guljag Industries [Guljag Industries v. Commercial Taxes Officer  [2007] 9 VST 1 (SC); (2007) 293 ITR 584 (SC); (2007) 7 SCC 269 .] and in Saw Pipes Limited [State of Gujarat v. Saw Pipes Ltd. 2023 SCC OnLine SC 428(2023) 112 GSTR 221 (SC)] . The Supreme Court has held in such authorities that, mens rea is not an essential ingredient for contravention of the provisions of a civil Act. It has also held that, penalty is directed since the contravention of the statutory provisions as contemplated by a statute is established and therefore, the intention of the parties committing such violation becomes immaterial. The breach of civil obligations which attracts penalty under the provision of a statute would immediately attract levy of the penalty irrespective of the fact whether the contravention has been made by the defaulter with any guilty intention or not. In none of these three authorities the Supreme Court had the occasion to consider the provisions of the Act of 2017.
16. In case of Asian Switchgear (supra) the point for consideration before hon’ble High Court was regarding necessity of intent to evade tax for imposing penalty under section 129 of GST Act, therefore, it is an important verdict on this point. It is held in this case that intent to evade tax is not necessary for imposing penalty under this section and it is a civil liability therefore mens ara is also not required for imposing penalty under this section.
17. In Satyam Shivam Papers (supra) the traffic was blocked due to political rally on 4.01.2020 and 5.01.2020 was a Sunday. Vehicle was detained on 06.01.2020. Tax Officer unloaded goods at house of 2nd respondent.
In Maa Amba (supra) e way bill was expired on 12.05.23 11.59 PM and vehicle was intercepted on very next day i.e. 13.05.23 and e way bill was also extended after incident.
In T.P. Metals (supra) e-way bill was expired on 24.10.21 and vehicle was intercepted on 25.10.21 at 9.59 AM.
Case of Podaran Foods India (supra) is not related to expired e way bill.
Therefore, the facts of above cases are quite deferent to these appeals. In these appeals vehicles were intercepted after six days from the expiry of e way bills.
18. The case of Satyam, T.P. Metal and Podaran are related to before amendment in section 129 of GST Act, when the word “Tax and Penalty” were in this section but after amendment the word “Tax” has been omitted by Legislature. By this reason also these citations do not assist to appellants.
19. Hon’ble Chhattisgarh High Court in case of Shree Radhemani Multitrade (P.) Ltd. v. State of Chhattisgarh   23 (Chhattisgarh)/(2025) 54 GSTJ 49 (CG) also in para 12 of the judgment distinguished the above case of Satyam Shivam in factual background.
20. In light of above legal position and above discussion we held that for invoking the of provision of section 129 (1) of GST Act or/and imposing penalty under this section the proof or facts, circumstances or material on record which shows intent to evade tax are not required, therefore, we decide above question of law in Favor of the respondent.
21. Rule 138 (10) of GST Rules, 2017 third proviso is: –
Provided also that the validity of the e-way bill may be extended within eight hours from the time of its expiry.
22. Now we examine the facts of these appeals in the context of above legal position.
23. It is an admitted fact that on 20.09. 2024 at 12.05 PM vehicle number RJ 47 GA 4307 at Banaras Road, Songara and on the same date at 2.10 PM vehicle number RJ 17 GA 4307 at same place were inspected by State Tax Officer. Tax Officer found that e way bills of both the vehicles were expired on 14.09.2024 11.59 AM. i.e. before 6 days of inspection.
24. According to appellants the vehicles had broken down near the destination, therefore, did not reach its destination. Appellants did not produce any bills of repairing of vehicles or any supporting evidence which may corroborate the incident of breakdown of vehicles. Appellants are a logistic entity situated near a big city Jaipur. It is also a peculiar fact of the cases that supplier, recipient or drivers did not take any step to extend/amend the e way bills in those 6 days. According to appellants the drivers did not amend e way bills due to lack of knowledge but amendment of e way bills could be made by either supplier or recipient or transporter. Driver has no role in it.
25. According to appellants, vehicles were remained near the destination at the time of its interception on 20.09.24. Appellants did not produce any evidence that which kind of problem was there in the vehicles, so drivers were not in a position to move the vehicles for destination up to 14.09.24.
26. A ground regarding stock transfer has been taken by appellants. In our considered opinion, merely because the cases relate to stock transfers, the appellants are not exonerated from their failure to amend the e-way bills for such a long time in the garb of stock transfers.
27. From above discussion we find following facts: –
1. The e way bills were expired on 14.09.24.at 11.59 AM and vehicles were intercepted on 20.09.24 at 12.05 PM and 2.10 PM after six days from expiry of e way bills.
2. There are no bills for the repair of the vehicles on record, though the vehicles belonged to the appellants’ own Rajasthan unit, as stated in ground No. 2 of the appeals.
3. Appellants did not produce any evidence that which kind of problem was there in the vehicles, so drivers were not in a position to move the vehicles for destination up to 14.9.24 or even up to 20.09.24.
4. Neither Jaipur branch of appellants nor Chhattisgarh branch of appellants attempted to amend e way bills in above six days.
5. Transporter of vehicles did not attempt to amend e way bills.
6. Vehicles were only 300 Kilometre from destination when intercepted. Looking to the road condition in 2024 this distance is only of 7 hours.
7. Though the cases related to stock transfer but it is an interstate stock transfer. Appellants did not get any exemption from non-amending e way bills for days only due to cases of stock transfer.
8. E invoices and stock transfer are not giving any blanket permission to appellants for non-amending e way bills for days.
9. Destination from supplier place and recipient place is 1486 Kilometre as per e way bills. E way bills were granted from 06.09.2024 at 4.14.PM to 14.09.2024 11.59 PM for 8 days and 08 hour it means vehicles which were to arrive on 14.09.2024 not reached till 20,09.24.
28. So far as the non-compliance of Circular no. 41/15/2018-GST dated 13.4.2018, non-providing opportunity of being heard as stated in section 129 (4) of GST Act non-giving notice under section 129 (3) of GST Act and non-suppling copies of various FORM are concerned, appellants have full opportunity before this Tribunal to produce their explanation, documentary evidence (if any) for non-amending e way bills. Being a final fact-finding authority, this Tribunal can consider explanation.
29. In above circumstances we can draw an adverse inference against appellants that; –
”The evidence which could be produced but that is not produced, if produced, be unfavourable to the person who withholds it”. [section 114 g of Indian Evidence Act, 1873 now section 119 g of Bhartiya Sakshya Adhiniyam, 2023.
30. The learned Chartered Accountant has also placed reliance upon Circular No. 64 dated 14.09.2018 issued by the C.B.I.C. but it is not given any assistance to appellant because in this circular it is not mentioned that where e way bill has been expired no proceeding under section 129 of GST Act be initiated. In para number 5 of this circular, there are some exceptions in which the proceeding under section 129 shall not be initiated, where a valid e way bill is accompanied with consignment of goods. The cases of appellants did not cover in any above exception because there was no valid e way bills with vehicles.
31. We do not find any satisfactory explanation of appellants for non- validation of e way bills within prescribed period. In our considered opinion these appeals are not acceptable.
32. Hence both the appeals are rejected. No order to costs.