The Karnataka High Court has reaffirmed that minor procedural lapses in e-way bill compliance cannot be the basis for harsh penal action under the GST regime. In a significant ruling, the Court held that detention of goods and imposition of penalty solely for non-mention of the vehicle number in Part-B of the e-way bill is unsustainable when all other documents are valid and there is no intent to evade tax. The judgment emphasizes that such omissions are curable bona fide errors and underscores the principle that GST enforcement must focus on substance over form.
Case details:
Court: Karnataka High Court
Date: 17 November 2025
Citation: [2025] 181 taxmann.com 707 (Karnataka)
Area: GST – Detention & Penalty under section 129
Facts of the Case
- The assessee was transporting goods accompanied by:
- Valid tax invoice
- E-way bill (Part-A duly filled)
- Part-B of the e-way bill did not contain the vehicle number at the time of interception.
- GST authorities detained the goods and vehicle and imposed penalty under section 129, alleging contravention of e-way bill provisions.
Issue Before the Court
Whether detention and penalty under section 129 of the CGST Act are justified solely for non-mention of vehicle number in Part-B of the e-way bill, when:
- Other documents are valid and tallying, and
- There is no intent to evade tax.
Held (Decision)
The Karnataka High Court quashed the detention and penalty, holding that:
- Non-mention of vehicle number in Part-B of the e-way bill is a procedural and curable defect
- Such omission, by itself, does not indicate tax evasion
- All other statutory documents were in order and consistent
- There was no revenue loss or mens rea
Key Observations of the Court
- Section 129 is a penal provision and must be invoked only when there is a clear intent to evade tax
- Minor or technical lapses cannot be equated with suppression or evasion
- Authorities must adopt a pragmatic and proportional approach
- GST law does not intend to penalize bona fide human or clerical errors
Ratio Decidendi
Failure to mention the vehicle number in Part-B of the e-way bill is a curable procedural lapse and cannot attract detention or penalty under section 129 in the absence of intent to evade tax.
Relevant Provisions
- Section 129, CGST Act – Detention, seizure and release of goods
- Rule 138, CGST Rules – E-way bill requirements
Practical Takeaway
✅ No penalty or detention for minor, technical e-way bill defects
✅ Authorities must verify intent to evade tax, not merely procedural lapses
✅ Strong relief for taxpayers facing harsh action for clerical mistakes