Issue: Whether mere expiry of the e-way bill, without any other discrepancy or intent to evade tax, justifies imposition of 200% penalty under Section 129 of the CGST/WBGST Act.

Held that: The Court noted that the only ground for detention was that the e-way bill had expired; no other discrepancy was alleged by the department. Under Rule 138 of WBGST Rules, extension of e-way bill is permissible within 8 hours. Even if this period was allowed, the delay was 17 hours. The explanation of traffic blockage was not disputed by the department.

Further, the Court noted that there was no evidence of tax evasion or mala fide intention by the assessee.

Thus, the Court held that imposition of 200% penalty in a mechanical manner was not justified. Reliance was placed on Progressive Metals Pvt. Ltd. v. Deputy Commissioner, State Tax, wherein the Court had set aside a similar penalty. The distance between the place of interception and delivery point was only 200 km, to be covered in less than 4 hours, further negating tax evasion intent.

Accordingly, the Court reinforces that mere technical lapses like expiry of e-way bills, without evidence of evasion, cannot attract harsh penal provisions under Section 129.The Division Bench allowed the appeal and the writ petition, set aside the orders of the original and appellate authorities, and directed the department to refund the penalty upon application within eight weeks.

Case Name: HINDUSTHAN BIRI LEAVES & ANR. v. ASSISTANT COMMISSIONER OF STATE TAX, BUREAU OF INVESTIGATION, DURGAPUR ZONE & ORS. dated 09.09.2025

To read the complete judgement 2025 Taxo.online 2280