100% GST Penalty for Wrong Destination in E-Way Bill Upheld: MP HC

The Madhya Pradesh High Court has upheld the imposition of a 100% penalty under Section 129 of the MP GST Act, 2017 for an incorrect destination mentioned in an e-way bill, holding that such an error could not be treated as a mere bona fide clerical mistake in the facts of the case. The bench of Justice Vivek Rusia and Justice Pradeep Mittal has observed that the GST department has no other way to track the shipments/ consignments except apprehending or detention and searching the papers. There is no such online tracking system of the consignee; therefore, if the consignment was found at route or an address other than the address mentioned in the E-way bill, the provisions of Section 129 are attracted. Amara Raja Batteries Limited, a well-known manufacturer of lead-acid batteries with its registered office in Andhra Pradesh, operates warehouses across several States, including Ahmedabad (Gujarat) and two locations in Madhya Pradesh—Indore and Jabalpur—under a common GST registration. On 26 February 2019, the company booked a consignment of 56 batteries for transfer from its Ahmedabad warehouse to its Jabalpur warehouse. The movement of goods was supported by a consignment note and three tax invoices, all of which correctly mentioned Jabalpur as the destination. The applicable IGST and SGST aggregating to ₹2,17,305 were also duly paid. However, while generating the e-way bill, the destination was mistakenly mentioned as Indore instead of Jabalpur. According to the company, this error occurred due to a clerical lapse by an employee stationed at the Ahmedabad warehouse. On 1 March 2019, the vehicle carrying the goods was intercepted by GST officials near Bhopal, around 200 km beyond Indore and on the route to Jabalpur. Upon verification, the officers noticed a mismatch between the destination stated in the e-way bill and that mentioned in the invoices and consignment note. Treating the discrepancy as a violation of the GST provisions, the authorities detained the goods and imposed a penalty equal to 100% of the tax amount, i.e., ₹2,17,305, under Section 129 of the MP GST Act, 2017. The penalty was paid under protest to secure release of the goods. An appeal filed by the company under Section 107 of the GST Act was dismissed by the appellate authority on 18 December 2019, prompting the company to approach the High Court. Before the High Court, Amara Raja Batteries contended that the incorrect mention of Indore instead of Jabalpur in the e-way bill was a purely clerical and bona fide mistake, without any intention to evade tax. Since the entire tax liability had already been discharged and the invoices correctly reflected the destination, imposition of a 100% penalty was harsh and disproportionate. The case was covered by Clause 5(c) of the CBIC Circular dated 14 September 2018, which advises against initiating proceedings under Section 129 in cases where there is an error in the consignee’s address, provided the locality and other details are correct. The SGST Department opposed the petition, arguing that Section 129 is a strict liability provision, and the statute does not carve out any exception for bona fide or inadvertent mistakes. The e-way bill was generated for Indore, but the goods were found moving well beyond Indore towards Jabalpur, amounting to a clear route violation under Rule 138(3) of the CGST Rules, 2017. Clause 5(c) of the CBIC Circular was inapplicable, as the mistake was not confined to a locality or minor address detail but involved a completely different city. The precedents cited by the petitioner were distinguishable on facts. The Court noted that both the invoices and the e-way bill were generated on 26 February 2019, while the vehicle was intercepted on 1 March 2019. Given the distance between Ahmedabad, Indore, and Jabalpur, the petitioner had ample time to notice and correct the mistake in the e-way bill but failed to do so. Since the goods were being transferred between two branches of the same company, the Court found it difficult to accept the plea of an inadvertent error. It observed that when a company sends goods to itself, it is expected to be fully aware of its own addresses, remarking that “there can’t be an inadvertent mistake in mentioning the address” in such circumstances. The Court expressed concern that an incorrectly generated e-way bill could potentially be reused for multiple consignments, especially when internal branch transfers are involved. The petitioner failed to produce internal records such as ledgers, account books, or goods movement registers to conclusively establish that the specific consignment was indeed meant for the Jabalpur warehouse. Rejecting reliance on the CBIC Circular, the Court held that the term “locality” refers to a limited area within a town or city. Mentioning Indore when the vehicle was found near Bhopal en route to Jabalpur could not be treated as a mere locality-level error. The Court dismissed the writ petition and upheld the penalty imposed by the GST department and concluded that the petitioner failed to establish that the error in the e-way bill was bona fide and that the statutory requirements under the GST law had been strictly violated. Case Details Case Title: Amara Raja Batteries Limited Versus The State Of Madhya Pradesh And Others Case No.: Writ Petition No. 6736 Of 2022 Date: 10/12/2025 Counsel For Petitioner: Sahil Sharma Counsel For Respondent: Rajvardhan Datt Padhraha Click Here To Read Order Read More: Neither GST Appellate Authority Nor HC Can Condone Delays Beyond Maximum Period Expressly Permitted Under GST Act: Gujarat HC

100% GST Penalty for Wrong Destination in E-Way Bill Upheld: MP HC

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