The Goods and Services Tax Appellate Tribunal (GSTAT), Raipur Bench, has upheld a penalty of ₹5.96 lakh for transporting goods under an expired e-way bill, holding that the Department need not establish an intention to evade tax before imposing a penalty under Section 129(1) of the GST Act.

The Bench of Pradeep Kumar Vyas (Judicial Member) and Chandra Bhushan Singh (Technical Member) found that the company had failed to substantiate its explanation that repeated vehicle breakdowns had delayed the consignment and caused the e-way bill to expire. 

Buy Now: 160+ GST E-Magazine September 2026

The dispute concerned the transportation of MS billets from Bilha in Bilaspur to JTL Industries Limited at Sarora, Raipur, over an approximate distance of 79 kilometres.

The consignment was dispatched on September 12, 2025, and the vehicle was intercepted at Metal Park, Rawabhata, on September 16, 2025. The driver produced the invoice, transport bilty and e-way bill. However, the e-way bill expired on September 13, 2025.

The goods had a taxable value of ₹16,56,675, with CGST and SGST of ₹1,49,101 each. The tax officer imposed a penalty of ₹2,98,202 under each tax head, taking the total penalty to ₹5,96,404 under Section 129(1)(a). The company paid the penalty to secure release of the vehicle and subsequently challenged the demand.

After its first appeal was dismissed, the company approached the Tribunal.

The company argued that the vehicle had broken down on three occasions during the journey and that the delay arose from circumstances beyond its control. It maintained that the vehicle was approximately four kilometres from its destination when intercepted.

It also emphasised that all relevant documents accompanied the goods and that there was no discrepancy in the description, quantity, value, supplier or recipient. According to the company, the absence of any evidence of tax evasion made the substantial penalty unjustified.

To support its explanation, it relied on GPS records, repair documents, a reference to vehicle breakdown in Form DRC-03, judicial precedents and CBIC Circular No. 64 dated September 14, 2018.

The Department disputed the breakdown explanation and argued that the company had neither extended the e-way bill’s validity nor produced reliable evidence establishing the circumstances behind the delay.

The Tribunal held that Section 129(1) applies where goods are transported or stored during transit in contravention of the GST Act or its rules. It observed that the provision does not expressly require an intention to evade tax, unlike the intention-based language appearing in Section 130.

Relying on the Calcutta High Court’s decision in Asian Switchgear (P) Ltd. v. State Tax Officer and authorities concerning penalties for breach of civil obligations, the Bench held that mens rea, or guilty intention, was not essential for imposing the penalty.

The Tribunal therefore rejected the argument that Section 129 could be invoked only when the record contained evidence demonstrating an intention to evade tax. 

While examining the evidence, the Tribunal disagreed with the first appellate authority’s rejection of the GPS report solely because it contained a disclaimer about system-generated data.

Nevertheless, it found that the GPS report identified vehicle number CG-04-IM-0317, whereas the intercepted vehicle bore registration number CG-04-LM-0317. Consequently, the report did not establish the movement of the vehicle involved in the dispute.

The Tribunal also independently examined the repair papers because the first appellate authority had not assessed their authenticity or evidentiary value. It found that the documents included estimates rather than completed transaction bills, an unsigned credit memo and other inadequately substantiated papers. These documents, it held, did not reliably prove the alleged repairs and breakdowns.

The reference to breakdown in Form DRC-03 was made on September 25, 2025, nine days after interception. The Tribunal noted that it did not describe the three breakdowns subsequently pleaded in appeal.

It also rejected the assertion that the driver had disclosed the breakdowns in his statement. The record did not establish that a request for a copy of his statement had been refused or left unanswered, and no affidavit from the driver was produced.

The Bench acknowledged that the invoice and accompanying documents correctly recorded the goods and the parties to the transaction. However, it held that these matching particulars did not overcome the admitted expiry of the e-way bill or the failure to extend its validity through the prescribed mechanism.

The Tribunal distinguished the judgments cited by the company on their facts, including cases involving traffic obstruction, shorter periods of expiry or generation of a fresh e-way bill before the penalty order.

It further held that the exceptions for specified minor errors under CBIC Circular No. 64 dated September 14, 2018, did not cover the expired e-way bill situation before it.

Answering the legal issue in favour of the Department, the Tribunal dismissed the appeal and sustained the entire penalty of ₹5,96,404. 

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: GST Penalty Not Automatic For E-Way Bill Lapses: GSTAT