Decided 28 September 2026. The Lucknow Bench of GSTAT has set aside a penalty of ₹1,57,516 under section 129 imposed because an e-way bill expired about 30 hours before the vehicle was intercepted near its destination. With a valid invoice, no diversion and no evidence of intent to evade tax, the expiry was only a procedural lapse.
Case at a glance
| Case | M/s Om Fuels v. State Tax, Uttar Pradesh |
| Forum | GSTAT, State Bench Lucknow (Court I) |
| Appeal No. | APL/15/LCK/2026 |
| Date of order | 28 September 2026 |
| Penalty | ₹1,57,516 under section 129 |
| Route | Gujarat to Ayodhya (about 1,300 km) |
| Result | Appeal allowed; penalty set aside |
Facts of the case
Goods were moving from Gujarat to Ayodhya with a valid tax invoice and e-way bill valid until 22.10.2025 at 11:59 PM. The vehicle was intercepted on 24.10.2025 at about 6 AM near the declared delivery address.
The appellant explained that the e-way bill could not be extended due to staff shortage during Diwali, office closure on Bhai Dooj (23.10.2025) and the driver not informing it. The first appellate authority upheld the penalty.
Issue before the Tribunal
Does expiry of an e-way bill by itself justify penalty under section 129?
What the Tribunal held
- Expiry of the e-way bill is a procedural lapse. It does not by itself prove intent to evade tax.
- There was no diversion of goods, no mismatch in goods and no suppression of the transaction; the vehicle was near the declared destination.
- The Supreme Court in Satyam Shivam Papers declined to interfere where no intent could be inferred from non-extension of an e-way bill. The Allahabad High Court in Hindustan Herbal Cosmetics and the Supreme Court in Hindustan Steel support the same view.
- The department produced no independent evidence of intent, so the penalty was set aside; any deposit is to be dealt with in accordance with law.
Practical takeaways for taxpayers
- Extend e-way bills before expiry, especially during holidays and on long routes.
- If goods are detained only for an expired e-way bill, document the reasons for delay and the route followed.
- Claim refund of penalty paid once the order is set aside.
Frequently asked questions
Is penalty mandatory if an e-way bill expires during transit?
Not where there is no intent to evade tax, according to GSTAT Lucknow and Satyam Shivam Papers.
What evidence helps?
Valid invoice, interception near the declared destination, and a reasonable explanation for the delay.
Facing a similar GST dispute?
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This summary is based on the order of the GST Appellate Tribunal, State Bench Lucknow in Appeal No. APL/15/LCK/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.