Facts of the Case:

In this case, the petitioner engaged in the business of logistics and duly registered under the GST laws, was transporting a motor vehicle chassis on behalf of Ashok Leyland Limited. The consignment was duly accompanied by a valid tax invoice, e-way bill, sale certificate, and a trade certificate. While generating the e-way bill on 10.08.2018, Part-B was filled by the assessee. However, due to auto-population by the system, the distance was incorrectly reflected as 170 kilometers instead of the actual distance of approximately 800 kilometers. Consequently, the validity of the e-way bill was generated only up to 12.08.2018. During transit, the vehicle was intercepted after expiry of the e-way bill and the goods were seized solely on the ground that the e-way bill had expired. No other discrepancy in documentation or tax payment was found.

Proceedings under Section 129(3) of the U.P. GST Act were initiated, and a penalty of ₹30,63,680 was imposed. The appeal filed by the petitioner was dismissed, confirming seizure and penalty, leading to the present writ petition.

Issue:

Whether seizure of goods and imposition of penalty under Section 129(3) of the U.P. GST Act is justified solely on the ground of expiry of the e-way bill, when the goods were duly accompanied by valid tax invoices and statutory documents, and the expiry resulted from an auto-generated technical error without any intent to evade tax.

Held that:

The Court observed that the goods in question were motor vehicle chassis, a highly regulated commodity that cannot be sold or transported without proper registration and statutory documentation. It was undisputed that the consignment was accompanied by a valid tax invoice, trade certificate, temporary registration, and e-way bill clearly disclosing the destination as Ghazipur, Uttar Pradesh.

The Court accepted the petitioner’s submission that the incorrect distance and consequent reduced validity of the e-way bill resulted from auto-population by the system, which could not be amended by the assessee. This factual assertion was not disputed by the revenue. The Court further noted that no discrepancy other than expiry of the e-way bill was found and that a fresh e-way bill had been generated before passing of the adjudication order.

Relying on settled judicial precedents, including the judgment of the Supreme Court in Assistant Commissioner (ST) v. Satyam Shivam Papers Pvt. Ltd. and several decisions of the Allahabad High Court, the Court reiterated that mere expiry of an e-way bill, particularly due to technical or procedural lapses, cannot be equated with an intention to evade tax. In the absence of any mens rea or material indicating tax evasion, invocation of Section 129(3) was held to be illegal.

Accordingly, the impugned order confirming seizure and penalty was quashed, and the writ petition was allowed.

Case Name: M/s Metropolis Logistics Pvt Ltd. Versus Additional Commissioner And 2 Others dated 16.12.2025