What’s the penalty for transporting goods without a valid e-way bill ?

Calcutta High Court Reduces GST Penalty for Appollo Plywood Industries. Exceptional Circumstances Lead to Reduction of Penalty for Expired E-Way Bill from 200% to Rs. 25,000

In a significant judgment, the Calcutta High Court has reduced the penalty imposed on M/s. Appollo Plywood Industries for transporting goods without a valid e-way bill. The Division Bench, comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das), heard the appeal against the order passed by the learned Single Bench, which refused to grant an interim order and directed the filing of an affidavit-in-opposition.

The case revolved around a penalty of Rs. 7,31,661.00 imposed under Section 129 of the Goods and Services Tax Act, 2017, for transporting goods from Manipur to Raiganj without extending the validity of the e-way bill. Despite the e-way bill expiring at midnight on April 3, 2025, the appellants argued that exceptional circumstances, such as a political rally and inclement weather, caused delays in transportation.

The High Court noted that there was no intent to evade tax, as corroborated by the absence of any allegations regarding the goods' quantity, nature, invoice details, or other documents. The judgment emphasized that the authorities must consider such attending circumstances and not impose the statutory penalty of 200% of the tax payable in every case of expired e-way bills.

Referring to a similar case, Assistant Commissioner, State Tax, Durgapore Range v. Ahok Kuamr Sureka, the court underscored the need for informed decision-making by authorities and reduced the penalty to Rs. 25,000, acknowledging the appellants' responsibility to have a valid e-way bill but considering the circumstances that prevented timely action.

The judgment directs the refund of the excess penalty amount paid by the appellants, to be processed within three weeks of receiving the server copy of the judgment. The penalty amount of Rs. 25,000 shall be equally divided between the penalties under the West Bengal Goods and Services Tax Act and the Central Goods and Services Tax Act.

This judgment sets a precedent for considering the context and reasons for non-compliance in taxation matters, particularly in the transport of goods under the GST regime. It highlights the judiciary's role in ensuring fair treatment and proportional penalties, taking into account both statutory requirements and real-world challenges faced by businesses.

Bottom Line:

Penalty imposed under Section 129 of WBGST/CGST Act, 2017 for transporting goods without a valid e-way bill - Court held that absence of intent to evade tax and exceptional circumstances causing delay in transport should be considered - Penalty reduced to Rs. 25,000/- instead of 200% of tax payable.

Statutory provision(s): Section 129 of WBGST/CGST Act, 2017, Rule 138 of the West Bengal Goods and Services Tax Rules, 2017

M/s. Appollo Plywood Industries v. Assistant Commissioner of Revenue, State Tax, Bureau of Investigation, North Bengal, (Calcutta)(DB) : Law Finder Doc Id # 2765571