Expired E-Way Bill Justifies Section 129 Penalty As Mens Rea

Expired E-Way Bill Justifies Section 129 Penalty As Mens Rea Is Irrelevant For Transit Contraventions

Issue

Whether the levy of penalty under Section 129 for transporting goods with an expired e-way bill requires proof of an intention to evade tax (mens rea).
Whether unverified, non-contemporaneous breakdown claims and invalid GPS logs justify the failure to extend e-way bill validity within the statutory window under Rule 138.

Facts

Consignment & Movement: In September 2025, a supplier transported MS billets over a distance of approximately 79 km from Bilha to Raipur, carrying a tax invoice, bilty, and an e-way bill.
Interception & Lapse: The vehicle was intercepted near the consignee’s premises. While physical documents carried no facial discrepancies, the e-way bill had expired prior to interception.
Detention & Initial Appeal: The State Tax Officer detained the goods and conveyance and imposed a penalty under Section 129. The First Appellate Authority sustained the penalty due to the failure to extend the e-way bill validity within the permissible statutory time window.
Defense Claims: The appellant produced GPS logs and vehicle repair bills to justify the delay, claiming an unexpected mechanical breakdown.
Rejection of Evidence: Upon verification, the GPS report was found to pertain to a completely different vehicle and was generated post-interception. The repair documents lacked evidentiary credibility, as the alleged breakdown was never disclosed contemporaneously to intercepting officers, nor was any proof shown regarding a request for the driver’s statement.

Decision

Irrelevance of Mens Rea: Intent to evade tax is not a prerequisite for invoking penalty under Section 129. Penal action under Section 129 is civil in nature, making mens rea irrelevant.
Contravention Established: Moving goods with an expired e-way bill without obtaining a timely extension under Rule 138 constitutes a direct statutory contravention.
Inapplicability of Circular No. 64/2018: Reliance on Circular No. 64/2018 was misplaced because the minor procedural exceptions contemplated therein presuppose the existence of a valid e-way bill at the time of transit.
Penalty Sustained: On the admitted statutory lapse, the levy of penalty under Section 129(1)(a) was held fully justified, answering the question of law in favor of the Revenue and dismissing the appeal (decided in favor of Revenue).

Key Takeaways

Civil Liability Under Section 129: Section 129 imposes strict civil liability for procedural non-compliance during transit; proof of fraudulent intent or mens rea is not required to confirm penalties.
Mandatory Extension Window: Transporters and taxpayers must strictly track e-way bill validity and apply for extension within the statutory window under Rule 138 if delays occur due to breakdowns or transit impediments.
Contemporaneous Proof Required: Belated, unverified breakdown excuses or mismatched GPS reports submitted post-interception carry no evidentiary value to save an expired e-way bill from Section 129 detention.

GOODS AND SERVICE TAX APPELLATE TRIBUNAL , RAIPUR BENCH

Mangal Sponge and Steel (P.) Ltd.

Commissioner of State Tax

Pradeep Kumar Vyas, JUDICIAL MEMBER
and Chandra Bhushan Singh, TECHNICAL MEMBER

APL/45/RPR/2026

OCTOBER 13, 2026

Sanjay Kumar Jain, CA for the Appellant. Abhay Tiwari, Adv. for the Respondent.

ORDER

Pradeep Kumar Vyas Judicial Member. -The present appeal has been preferred under Section 112(1) of the Central Goods and Services Tax Act, 2017 and the Chhattisgarh Goods and Services Tax Act, 2017 (hereinafter referred to as the “GST Act, 2017”), against the order dated 19.01.2026 passed by the Appellate Authority and Joint Commissioner (Appeal), State Tax, Raipur, in First Appeal No. 640/GST/2025, in the case of M/s Mangal Sponge & Steel Private Limited, Bilaspur (C.G.), whereby the appeal preferred by the appellant was disallowed.

2. Due to involvement of legal issue, this appeal has been heard and decided by Division Bench.

3. The brief facts of the case are that the appellant supplied MS Billets, in transport vehicle no-CG-04 LM-0317 on 12.09.2025 with e-way bills to JT1 Industries Ltd. from Bilha, Bilaspur to village- sarora Raipur Chhattisgarh. According to e-way bills approximate distance between these two places are 79 kilometres. The vehicle was checked at Metal Park Rawabhata by Mrs. Ashish Shukla State Tax Officer on 16.09.2025 at 4.00 A.M. The officer asked documents from in charge of vehicle. Mrs. Jitendra Kumar driver presented invoice, e-way bills and billty. Driver gave the statement that MS billets is sent by Mangal Sponge and Steel Bilha to JTL Industries Ltd Raipur. The State Tax Officer found that the e-way bills have been expired on13.09.2025 at 3.59 P.M. but goods are being transporting. He issued GST FORM MOV -09. He assessed taxable value of goods Rs. 16,56,675/- on the basis of invoice. The State Tax Officer assessed CGST Rs. 1,49,101/- and SGST Rs. 1,49,101/- and demand of penalty CGST Rs. 2,98,202/- and SGST Rs. 2,98,202/-. According to provision of section-129(1)(a) GST Act.DRC-07 has been issued on 24.09.2025. Appellant deposited above penalty in compliance of above order therefore vehicle has been released.

Aggrieved by the aforesaid order, the appellant preferred a first appeal, which was dismissed as stated above.

4. The main grounds of appeal, as advanced by the appellant, are that the learned Appellate Authority failed to consider and deal with all the submissions made by the appellant during the course of personal hearing. It is further contended that the learned Appellate Authority erred in confirming the imposition of penalty equivalent to twice the amount of tax under Section 129(1)(a) of the GST Act, solely on the ground that the e-way bills had expired. The appellant submits that the e-way bills had expired due to repeated breakdown of the vehicle and not on account of any intention to evade payment of tax. It is contended that, at the time of inspection, the driver produced the GST invoice, transport bilty and e-way bill before the Inspecting Authority. The vehicle had broken down on three occasions, namely, first on 12.09.2025 at 7:22 P.M., again on 13.09.2025 at 5:49 A.M., and for the third time on 14.09.2025 at 2:34 P.M. During the course of repairs, the vehicle was inspected on 16.09.2025 at about 4:00 P.M., when it was only about four kilometres short of the destination. It is further submitted that the appellant relied upon C.B.I.C. Circular No. 64 dated 14.09.2018, wherein guidelines have been issued regarding proceedings under Section 129 of the GST Act in cases where the goods are accompanied by the requisite documents and e-way bill. According to the appellant, the said circular supports the contention that proceedings under Section 129 ought not to be initiated merely on account of an expired e-way bill in the absence of any intention to evade tax. The appellant also relied upon the Global Positioning System (GPS) records of the vehicle to establish its actual movement and to substantiate the explanation regarding the breakdown and subsequent repair of the vehicle. It is contended that the learned Appellate Authority failed to properly appreciate this material evidence in its correct perspective. The appellant has also relied upon various judicial precedents in support of the grounds raised in the appeal. If considered necessary, the same shall be dealt with at the appropriate stage of this order. On the aforesaid grounds, the appellant contends that the impugned order is unsustainable in law and on facts and that the appeal deserves to be allowed.

5. The respondent denied all the material statements of fact and grounds of appeal raised by the appellant. According to the respondent, the Appellate Authority passed a speaking and reasoned order after duly considering the material available on record, and all findings were recorded on the basis of the documents and evidence produced in the proceedings. It was submitted that the vehicle was found to be in movement after the expiry of the e-way bill, and therefore, the appellant had failed to comply with Rule 138(10) of the CGST Rules, 2017. The vehicle-repairing bills dated 13.09.2025 to 15.09.2025 do not provide any assistance to the appellant, as they do not establish that the vehicle had actually broken down during the course of transportation. The respondent further denied the allegation that the impugned order was passed without application of mind. It was contended that the intended distance of transportation was approximately 79 kilometres from Bhilai to Sarora, Raipur. The e-way bill was valid from 12.09.2025 to 13.09.2025 up to 23:59 hours. However, the vehicle was found at Rawanbhata on 16.09.2025, i.e., nearly three days after the expiry of the e-way bill, and only about four kilometres short of the consignee’s premises. The respondent submitted that, in the event of any genuine breakdown of the vehicle, the appellant or the transporter could have approached the proper officer, intimated the alleged breakdown through the common portal, or generated a fresh or extended e-way bill, as permissible under the law. However, no contemporaneous evidence has been produced to substantiate the alleged breakdown. There is no diary entry, police intimation, FASTag/toll record, insurance claim, or roadside-assistance record evidencing such breakdown. It was further submitted that, in his statement, the driver did not state that the vehicle had suffered any breakdown. He merely stated that the goods were being transported from Bhilai to Raipur and produced the invoice along with the expired e-way bill. According to the respondent, the plea of vehicle breakdown was an afterthought and a subsequent invention made only to explain the movement of the vehicle after expiry of the e-way bill. respondent also contended that the GPS report relied upon by the appellant is not a reliable piece of evidence, particularly in view of the express disclaimer contained therein. The judgments and decisions relied upon by the appellant are distinguishable on facts, and the respondent has specifically pointed out the distinguishing features of the present case in his reply with reference to each of the authorities cited by the appellant. It was further submitted that Circular No. 64 dated 14.09.2018 does not extend any benefit to the appellant, as the present case relates to movement of goods after the expiry of the e-way bill and does not fall within the circumstances contemplated by the said Circular. The respondent further submitted that the Hon’ble Supreme Court and various High Courts have held that the intention to evade tax is a relevant consideration while exercising powers under Section 129 of the GST Act. However, such intention cannot be treated as an inflexible or mandatory requirement in every case, particularly where the contravention is not merely a minor or technical error but a substantive violation, such as transportation of goods after the expiry of the e-way bill. According to the respondent, the provisions of Rule 138(10) of the CGST Rules, 2017 and Sections 68 and 129(1)(a) of the GST Act are clear and unambiguous. Since the appellant was found transporting goods after the expiry of the e-way bill and failed to establish any genuine or contemporaneous circumstance justifying such movement, the action taken by the authorities is legally sustainable.

Accordingly, the respondent prayed that the appeal, being devoid of merit, be dismissed.

6. The argument of the learned C.A. appearing on behalf of the appellant is that at the time of inspection of vehicle by Tax Officer the driver had invoices, transport bilty, e way bill i.e. all necessary documents only e way bill was expired due to vehicle breakdown thrice. There was Global Positioning System fitted in that vehicle. Appellant Submitted bills of vehicle repairing. When Tax Officer inspected vehicle, it was only 4 Kilometre away from his its destination. There is no evidence of evasion of tax on the record. Appellant also mention in DRC03 that there was breakdown of vehicle. Driver was also stated in his statement that the vehicle was breakdown.

7. The argument of the learned authorized representative appearing on behalf of the respondent is that there is a disclaimer recorded in GPS system, therefore, it is not providing any assistance to appellant. The bills of vehicle repairing are not reliable evidence. Driver of vehicle did not disclose any thing about vehicle breakdown in his statement. E way bill was expired long before inspection on 16.09.2025. Section 129 GST Act starts with non-obstructing Clouse. There is no requirement to prove the intention to evade tax by revenue for this provision. The facts of cases of cited case laws have different from this appeal.

8. Question of Law involved in the appeal is

1. Whether, in the facts and circumstances of the present case, the provisions relating to imposition of penalty under Section 129(1)(a) of the GST Act are not attracted?

REASONS OF CONCLUSION

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 some citations on these points.

10. we considered above arguments. In case of Patanjali Ayurved Ltd. v. UOI99 GSTL 7 (Allahabad) 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 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. Kandaswami, (1975) 4 SCC 745 has categorically stated that where a particular section is a charging as well as 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 v. Doba Steel Rolling Mills 2011 Volume 7 SCR 934 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 mentation 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 concern in case of SEBI v. Cabot International Capital Corp. (2004) SCC Online Bombay 180 Division Bench of Hon’ble Bombay High Court held in para-47 as under: –

(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 word used in the statute, it appears that the proceedings for imposition of the penalty are adjudicatory in mature, 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 determination to conclude the nature of proceedings being criminal of quasi-criminal. The relevant considerations being the nature of the functions being discharged by the authority and the determination of the liability of the contravene or and the delinquency.

(D)

Mens rea is not an essential element for imposing a 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 impowered by the act to adjudicate have to act judicial and follow the principals of natural justice to the extent applicable.

15. In case of Asian Switchgear (P.) Ltd. v. STO 79 GSTL 417 (Calcutta) 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 Chairman SEBI v. Shriram Mutual Fund and Another 2006 volume 5 SCC 361 (Supra), Guljag Industries v. Commercial Tax Officer 2011 Volume 7SCC 934(Supra) and in State of Gujrat v. Saw Pipes limited 2003 SCC Online 428 (Supra). 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. The learned Chartered Accountant has also relied upon various judicial precedents concerning Section 129 of the GST Act, as referred to under Ground C of the grounds of appeal as under: –

1. Asstt. Commissioner (ST) v. Satyam Shivam Papers (P.) Ltd. 90 GST 479/57 GSTL 97 (SC)

2. Trimble Mobility Solutions India (P) Ltd v. State of UP 112 GST 399/103 GSTL 269 (Allahabad)/[(2025) 36 Centax 13 (All.)

3. Amit Mines (P.) Ltd. v. Asstt. Commissioner of State Tax 111 GST 507 (Calcutta)/[(2025) 34 Centax 35 (Cal.)]

4. Appollo Plywood Industries v. Asstt. Commissioner of Revenue, State Tax 111 GST 446/102 GSTL 168 (Calcutta)/(2025) 33 Centax 243 (Cal.)

5. Nezone Tubes Ltd. v. UOI (Jharkhand)/[(2024) 18 Centax 150 (Jhar.)]

6. Bhushan Power & Steel Ltd. v. Additional Commissioner of State Taxes & Excise 34 GSTL 261 (AA- GST – HP))

7. Godrej Consumer Products Ltd. v. ACST & E-Cum-Proper Officer Circle Baddi, HP 81 GST 608/34 GSTL 272 (AA- GST – HP)

8. Birla Corporation Ltd. v. CCE /[2005] 186 ELT 266 (SC)

18. 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 2^nd respondent.

In Trimble Mobility Solutions India (P.) Ltd. (supra) a fresh e way bill was generated before order under section 129 of GST Act

In Amit Mines P. Ltd (supra) e-way bill was expired only before 15 hours.

In Appollo Plywood (supra) Industries e way bill was expired before a day.

In Nezone Tubes Ltd (supra) facts of the case is entirely different from this case.

Cases of Bhushan Power & Steel Limited and Godrej Consumer Products Limited is related to (Appellate Authority-HP which are not binding on us.

Case of Birla Corporation Ltd (supra) is about above two cases namely Bhushan and Godrej.

Therefore, these citations are not assise appellant.

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.

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 the person in charge of vehicle No. CG-04-LM-0317, namely Jitendra Kumar Yadav, produced the invoice, e-way bill, and bilty before the Inspecting Authority at the time of inspection conducted on 16.09.2025. As recorded in paragraph 5(2) of the Order in Appeal, there was no discrepancy in the description, quantity, or value of the goods. The Appellate Authority has further recorded that the invoice reflected a taxable value of Rs. 16,56,675/-, along with CGST of Rs. 1,49,101/- and SGST of Rs. 1,49,101/-, making the total invoice value Rs. 19,54,877/-. The names of the supplier and the recipient were also found to be correct.

However, the Inspecting Authority observed that the e-way bill had expired on 13.09.2025 at 11:59 P.M.

24. The learned Appellate Authority observed in the impugned order that the appellant had failed to amend or extend the validity of the e-way bill in accordance with the applicable rules. According to appellant the vehicles was broken down thrice between 12.09.25 to 14.09.25. The cause was beyond control of him. During repairing the vehicles was inspected.

25. The appellant produced the Global Positioning System (GPS) records pertaining to vehicle No. CG-04-IM-0317. Records were generated through the online system of Wheels eye Technology and constitute system-generated records. But it is not pertained to vehicle number CG-04-LM-0317. The learned Appellate Authority, however, disbelieved the said GPS records solely on the basis of the following disclaimer appearing as a footnote on the report:

“This is an auto-generated report developed by Wheels eye Technology for the sole use of our clients. We do not take responsibility for any data discrepancy or error as it is controlled by the system.”

Though the reason of disbelieve is not correct but it, on face of it, is not pertained to vehicle involved in this case, therefore, this GPS report is not relevant for this appeal. It is also relevant to note that this GPS report was generated on 25.09.2025 and vehicle was intercepted on 16.09.2025.

26. The appellant also produced documents relating to the repair and maintenance of the said vehicle. The learned Appellate Authority, in paragraph 4 of the Order in Appeal, acknowledged that the appellant had produced the vehicle repair bills; however, he did not examine or record any finding regarding the authenticity, genuineness, or evidentiary value of those bills. Being final Authority of fact finding this Tribunal can appreciate these documents.

27. We consider these bills of repair. Bills of Bansal Automobiles are not cash memo but estimate only. Estimate is prepared for only giving a rate offer like quotation but cash memo is prepared for a definite transection, therefore, we cannot consider estimate as authentic evidence of bill of repair. Bill of Hamaja is also a credit memo having no signature of authorised person. If we consider bill of National Auto Electrical and Shankar Motor Garaj it will neither cash memo nor estimate. Bill of Yuvraj Traders is a simple paper. It is clear from above discussion that bills of repair do not have an evidentiary value.

28. Learned CA appeared on behalf of appellant argued that appellant also mentioned in foot note of DRC03 about vehicle breakdown. We considered this document. This document is issued on 25.09.25 i.e. after 9 days of interception of vehicle. In this document appellant did not mention vehicle breakdown thrice. Before 25.09.25 appellant does not disclose about vehicle breakdown. Why appellant maintained keep silence in above 9 days. No explanation on record about that silence.

29. Learned AR appearing on behalf of the respondent contended that the driver, in his statement, did not mention that the vehicle had broken down on three occasions. We have considered the said contention. Learned CA appearing on behalf of the appellant contended that driver stated in his statement about vehicle breakdown but Tax Officer did not provide copy of statement of driver to appellant. We consider these arguments.

30. Where Tax Officer did not provide copy of statement to appellant, he may ask it by filing an application of Right to Information Act,2005. There is no material on record which support the contention of appellant that he applied for copy of statement of driver to the Authority but he denied or did not reply or filing an application under Right to Information Act, 2005. Appellant could file an affidavit of driver. Therefore, we do not agree with the argument of learned CA.

31. 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.

Accordingly, the aforesaid question of law is answered in favour of the respondent.

32. In light of above discussion this appeal is not acceptable Accordingly, the aforesaid question of law is answered in favour of the respondent.

33. Hence, the appeal is disallowed.