Detention of goods and the heavy penalty under section 129 remain a major pain point for businesses moving goods. This digest covers five recent GSTAT rulings that set aside or reduced penalties for e-way bill and e-invoice lapses.
Each entry links to the full post.
Key trends from these rulings
- Following Satyam Shivam Papers, every bench required evidence of intent to evade tax before upholding a section 129 penalty for documentation lapses.
- Goods that have reached the destination are not 'in transit' (Vardhman Yarns), and a late e-invoice with otherwise valid documents does not justify penalty (VLM Group).
- Where a lapse is purely technical, GSTAT Bengaluru substituted a Rs 25,000 general penalty under section 125 for a Rs 20.13 lakh section 129 penalty (Valuecart).
- The seven-day limits in section 129(3) are mandatory; a MOV-09 order passed 230 days after MOV-07 was void (Lachmandas).
E-way bill lapses
- GSTAT Lucknow - Om Fuels: GSTAT Lucknow sets aside ₹1.57 lakh penalty for an e-way bill that expired during Diwali on a 1,300 km trip; no evidence of intent to evade tax.
- GSTAT Bengaluru - Vardhman Yarns and Threads: GSTAT Bengaluru quashes s.129 demand for blank Part-B on a stock transfer: vehicle had reached destination, no mens rea, order back-dated after hearing.
- GSTAT Bengaluru - Valuecart: GSTAT Bengaluru quashes 200% penalty on duty-paid imports returned without a fresh e-way bill after a missed delivery slot; Rs 25,000 under s.125 instead.
E-invoice and procedure
- GSTAT Lucknow - VLM Group: GSTAT Lucknow quashes Rs 63.72 lakh penalty where machinery moved with tax invoice, e-way bill and LR but no IRN; e-invoice generated later, no evasion shown.
- GSTAT Ernakulam - Lachmandas & Company: GSTAT Ernakulam quashes Rs 39.21 lakh s.129 demand: MOV-09 passed 230 days after MOV-07 violates the mandatory 7-day limit; Covid-era stock transfer, no mens rea.
What businesses should do now
- Extend e-way bills before expiry and update Part-B before movement starts; generate a fresh e-way bill for return trips.
- Generate e-invoices before dispatch if you are covered by e-invoicing.
- If detained, note the dates of MOV-06, MOV-07 and MOV-09 and check the seven-day limits.
- Keep evidence of the reason for any lapse, such as traffic, holidays or slot cancellations.
Frequently asked questions
Is penalty under section 129 automatic for an e-way bill lapse?
Not according to these rulings; without evidence of intent to evade, penalties were set aside or reduced.
What is the time limit for a section 129 penalty order?
Notice within seven days of detention and order within seven days of service of notice; GSTAT Ernakulam held these limits mandatory.
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This digest summarises judgments and orders added to our case law library in October 2026. Each linked post explains one ruling in more detail. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.