The Allahabad High Court addressed a case involving M/s Metropolis Logistics Pvt. Ltd., where goods were transported with all necessary statutory documents but faced issues due to a technical error on the GST portal. Specifically, the e-way bill expired because of an incorrect auto-populated distance, leading to the seizure of goods and imposition of a penalty. The petitioner challenged this action, arguing it was arbitrary.
The central issue was whether the expiry of an e-way bill due to a technical error could be considered tax evasion. The High Court ruled that for a penalty under GST to be valid, there must be an intent to evade tax, which was not present in this case. The Court emphasized that the movement of goods was fully traceable and supported by valid documents on the GST portal, indicating compliance.
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The Court concluded that technical or system-generated errors should not be equated with deliberate non-compliance. The seizure and penalty orders were quashed, underscoring the need for GST enforcement to differentiate between procedural lapses and actual tax evasion. This decision reinforces the principle that penalties should not be imposed where there is no intent to evade taxes, especially in cases involving technical glitches.
Parties: M/s Metropolis Logistics Pvt. Ltd. vs. Additional Commissioner and Others
Date: 16 December 2025
Facts:
- The petitioner transported goods with all statutory documents.
- The e-way bill expired due to incorrect auto-populated distance on the GST portal.
- Goods were seized and penalty imposed solely on this ground.
- The action was challenged as arbitrary.
Issue:
- Whether expiry of an e-way bill due to a technical error amounts to tax evasion?
Order:
- The High Court held that penalty proceedings under GST require existence of intent to evade tax, which was clearly absent in the present case.
- It noted that the entire movement of goods was fully traceable on the GST portal and supported by valid statutory documents.
- The Court observed that technical or system-generated errors cannot be equated with deliberate non-compliance.
- Accordingly, the seizure and penalty orders were quashed, reaffirming that GST enforcement must distinguish between procedural lapses and tax evasion.
