The Allahabad High Court has set aside a penalty imposed on M/s Cross Wheels Auto Pvt. Ltd. for transporting goods with an expired e-way bill. The case involved the transport of two-wheeler motorcycles, which were invoiced and had e-way bills generated on June 3, 2023. Due to a change in drivers, the goods were dispatched on June 14, 2023, and reached their destination on June 15, 2023. However, unloading was delayed due to space issues, and the vehicle remained near the godown until June 23, 2023, when it was intercepted with an expired e-way bill.
The authorities had detained the goods and imposed a penalty under Section 129(3) of the GST Act, which was upheld on appeal. The petitioner argued that the goods had reached their destination before the e-way bill expired, supported by GPS logs, and emphasized the unique engine and chassis numbers of the motorcycles, which prevent reuse for tax evasion.
Read More: GST - Allahabad High Court: Short-loading of goods without evidence of intent to evade tax cannot justify seizure or continuation of Section 129 proceedings [Order attached]
The High Court ruled that the mere expiry of an e-way bill does not justify a penalty if there is no intention to evade tax and the goods are genuine. It noted that the vehicles' unique identifiers made them unsuitable for repeated use in tax evasion. The court referred to precedents where expired e-way bills alone were deemed insufficient for inferring tax evasion. Consequently, the penalty and appellate orders were quashed, and the writ petition was allowed, favoring the petitioner.
Parties: M/s Cross Wheels Auto Pvt. Ltd. v. State of U.P. & Ors.
Order Date: 17 November 2025
Facts –
- Petitioner deals in sale of two-wheeler motorcycles. Consignments (7 vehicles + 41 vehicles) were invoiced on 03.06.2023, e-way bills generated.
- Driver originally assigned did not report; a new driver was engaged on 13.06.2023. Goods moved on 14.06.2023 with all documents.
- Goods reached destination on 15.06.2023, but unloading was delayed due to lack of space. Vehicle remained near godown until 23.06.2023, when intercepted at 2 AM; e-way bill had expired.
- Authorities detained goods and imposed penalty under Section 129(3); appeal dismissed. Petitioner produced GPS logs showing goods reached before expiry and emphasized engine & chassis numbers proving authenticity.
Issue –
- Whether mere expiry of an e-way bill, when goods already reached destination and no intention to evade tax is evident, justifies penalty under Section 129?
Order –
- The High Court held that Two-wheelers cannot be reused for tax evasion because of unique chassis and engine numbers.
- All documents were valid; GPS tracking confirmed arrival before expiry. No material was produced showing multi-use of documents or evasion.
- Cited precedents (Trimble Mobility, Panasonic India, Globe Panel Industries) holding that expired e-way bill alone is insufficient to infer evasion when goods are genuine. Penalty order dated 04.07.2023 and appellate order dated 11.08.2023 were quashed.
- Writ petition allowed.
