Judicial Corner:E-way bill expired due to vehicle breakdown no intent to evade tax penalty under Section 129 unjustified and liable to be set aside. { Balkrishna Industries Limited vs. Union of India & Ors. R/Tax Appeal No. 1903 of 2026 2026 LLBiz HC (GUJ) 24} (15.04.2026)

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E-way bill expired due to vehicle breakdown no intent to evade tax penalty under Section 129 unjustified and liable to be set aside. { Balkrishna Industries Limited vs. Union of India & Ors. R/Tax Appeal No. 1903 of 2026 2026 LLBiz HC (GUJ) 24}

Facts

  • The goods of the petitioner were intercepted during transit because the E-way bill had expired.
  • The vehicle was intercepted about 15 hours after the expiry of the E-way bill.
  • The expiry occurred because the vehicle had broken down, and therefore the transporter could not extend the validity of the E-way bill within the permitted time.
  • The GST authorities imposed a penalty of Rs.18,00,140 under Section 129 of the CGST Act and passed orders in Form GST MOV-9 and APL-04.
  • The petitioner challenged these orders before the Gujarat High Court seeking quashing of the penalty and refund of the amount. 

Issue

Whether penalty under Section 129 of the CGST Act can be imposed merely because the E-way bill expired during transit, particularly when there was no intention to evade tax and the expiry occurred due to circumstances such as vehicle breakdown.

Held

  • The Gujarat High Court held that imposition of a harsh penalty was unjustified in the facts of the case.
  • The Court observed that the expiry of the E-way bill was only a procedural lapse and there was no intention to evade tax.
  • Relying on earlier judgments, the Court held that such cases should not attract heavy penalty under Section 129.
  • Accordingly, the impugned orders were quashed, and the authorities were directed to refund Rs.18,00,140 along with applicable interest.