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) 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).
- 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.
