2026-VIL-505-CAL
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SGST High Court Cases

GST – Expiry of E-way Bill, Imposition of Penalty - During transportation the vehicle was intercepted at the location approximately ten kilometres away from the destination, at which point the e-way bill had expired – Levy of penalty equivalent to two hundred percent of the tax payable on the goods - Whether imposition of a penalty at the rate of two hundred percent of the tax payable was justified in the absence of any intention to evade payment of tax, where the only irregularity was the expiry of the e-way bill and the delay in seeking extension was approximately fifty minutes beyond the eight-hour grace period permitted under the rules – HELD – The sub-rule 10 of Rule 138 of the CGST Rules, 2017 provides a validity period for e-way bills and its proviso permits extension of the validity period within eight hours from the time of its expiry in circumstances of exceptional nature, thereby granting latitude to the transporter - The vehicle was intercepted approximately fifty minutes after the expiry of the permissible eight-hour window for seeking extension and no allegation of an intention to evade payment of tax was made by the department - The imposition of two hundred percent penalty is not warranted in cases involving failure to renew the e-way bill within the stipulated time. Though the statute empowers imposition of a rigid and high penalty of two hundred percent, whether or not such penalty is justified depends upon whether there existed any intention to evade payment of tax. Finding no such allegation in the present case and considering that the delay was merely fifty minutes beyond the permissible extension window, the imposition of the maximum penalty is harsh and would cause grave prejudice to the petitioners - The impugned order is set aside and the petitioner is directed to pay a nominal token fine of Rs. 10,000/-, the respondents are directed to refund the balance amount after adjusting the token fine from the amount already deposited – The petition stands disposed of
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