The Allahabad High Court has set aside an Integrated GST (IGST) demand and penalty imposed on a business over a minor technical error in an e-way bill, ruling that such discrepancies cannot form the sole basis for seizure and punitive action in absence of tax evasion intent.
The bench of Justice Piyush Agrawal observed that Justice Agrawal concluded that the authorities had not found any discrepancy in the invoice, quality, or quantity of goods and had not established any intent to evade tax. Thus, the penalty was held unjustified.
In June 2023, goods dispatched to Himachal Pradesh were intercepted near Mathura based on a truck driver’s statement that they had been loaded in Nagpur, while the e-way bill listed Chandrapur (Maharashtra) as the dispatch location. The authorities construed this as a discrepancy and imposed tax and penalty.
However, the petitioner clarified that Nagpur was an additional place of business registered under GST, and the mismatch was a technical error during the generation of the e-way bill. The primary issue raised was that no attempt was made to evade tax, nor was there any misrepresentation regarding the nature, quantity, or value of goods.
The petitioner contended that merely a wrong mention of place of loading would not change the nature of transaction or any concealment on the part of the petitioner. The authorities below have nowhere recorded a finding that the petitioner has intention to evade tax.
The Court found merit in the petitioner’s submission and referred to previous rulings including M/s Zhuzoor Infratech Pvt Ltd and Sun Flag Iron and Steel Co Ltd, which established that The purpose of an e-way bill is to track the movement of goods. A valid, uncancelled e-way bill indicates a bona fide transaction. A minor clerical error in dispatch location does not imply tax evasion.
Case Details
Case Title: M/S Saumya Through Its Partner, Shri Ghanshyam Popat Versus Union Of India
Case No.: WRIT TAX No. – 664 of 2025
Date: 14.7.2025
Counsel For Petitioner: Ami Tandon
Counsel For Respondent: A.S.G.I., Abrar Ahmad,C.S.C.
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