Where technical error exists in e-way bill without discrepancy in goods or tax evasion intent, penalty under GST Act section 129(3) is unsustainable { Vishnu Singh vs. State of UP [2025] 172 taxmann.com 757 (Allahabad)}
Facts
- Petitioner: Proprietorship firm (Vishnu Singh) doing civil work contracts.
- While generating the e-way bill, the petitioner wrongly entered the SAP document number (770455482) instead of the invoice number.
- On 30 Aug 2023, the vehicle carrying the goods was intercepted at a toll plaza (Etawah). Authorities noticed the mismatch between invoice number and the number on the e-way bill
- All other documents (tax invoice, bilty, etc.) were valid and in order.
- The tax authorities issued a notice and imposed penalty + tax under Section 129(3) of the GST Act, based solely on the mismatch.
- The petitioner’s reply was rejected, and the appellate authority confirmed the penalty.
- Petitioner filed writ in Allahabad HC.
Issue
Whether a clerical / technical error in the e-way bill (incorrect invoice number) Â without any evidence of tax evasion or intent to defraud (i.e., no mens rea) is sufficient ground to impose penalty under Section 129(3) of the GST Act.
Held
- High Court quashed the penalty orders (both at the adjudication and appeal stage).
- Â Court observed that the only discrepancy was the invoice number in the e-way bill there was no mismatch in goods (quality, quantity, description).
- There was no finding / evidence of an intention to evade tax. The court emphasized that mens rea (intent) is essential for imposing a Section 129(3) penalty.
- Court noted the purpose of the e-way bill: primarily to provide visibility of goods in transit, not to trap taxpayers for innocent human errors.
- Since the e-way bill was generated (and not cancelled), the genuineness of the transaction could not be doubted merely because of a clerical mistake.
- Conclusion: Penalty under Section 129(3) is not sustainable in this case.
