The Allahabad High Court quashed penalty under Section 129(3) of the Uttar Pradesh Goods and Service Tax Act, 2017 (UPGST Act) imposed on slow movement of truck shown which occurred due to mechanical issues in engine. The Counsel appearing on behalf of the petitioner submitted that the e-invoice and the e-way bill were accompanying the vehicle carrying the goods and that the eway bill had expired four days prior to the date of detention. Counsel has submitted that the explanation for the delay in travel of the vehicle has also been given. It was submitted that during the course of movement, the engine of the vehicle in question got overheated, and therefore, the driver was driving the vehicle slowly and intermittently stopping the vehicle so that the engine did not get overheated.

The GPS tracking system was also produced before the authorities that indicated that the vehicle was traveling as per the original route. The counsel appearing on behalf of the respondents have submitted that in the event the e-way bill expired, there is a provision in the portal that allows the transporter/consignor/consignee to seek extension of the eway bill. Undisputedly, such extension was not carried out by the petitioner, and therefore, the contravention of the Rules has taken place and the penalty imposed under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 is in order and is required to be sustained.

A Single Bench of Justice Shekhar B. Saraf observed that “The goods were accompanied by the relevant documents and the explanation of the petitioner with regard to slow movement of the goods coupled with GPS tracking system clearly indicate that the truck was moving slowly due to mechanical fault in the engine of the vehicle. This factual aspect should be considered by the authorities below. The breach committed by the petitioner with respect to not extending time period of the e-way bill is only a technical breach and it cannot be the sole ground for penalty order being passed under Section 129(3) of Act. 6. In light of the above, I am of the view that the finding of the authorities with regard to intention to evade tax is not supported by the factual matrix of the case.”