Allahabad High Court Enforces Penalty for Transporting Goods Without E-Way Bill

The Allahabad High Court has reinforced the strict compliance requirements under GST law by
upholding penalties for the movement of goods without an e-way bill. This ruling, delivered in the
case of Gurunanak Arecanut Traders vs. Commercial Tax and Another, underscores the mandatory
nature of e-way bills and the legal consequences of non-compliance under Section 129 of the GST
Act.
Understanding the E-Way Bill Requirement
Under GST regulations, an e-way bill is a mandatory document required for the transportation of
goods valued above a specified threshold. It ensures tax compliance and prevents evasion by
providing a digital trail of goods in transit. The responsibility to generate and download the e-way
bill lies with the seller before the goods are put into transit.
Case Overview: Gurunanak Arecanut Traders vs. Commercial Tax & Another
In this case, Gurunanak Arecanut Traders was found transporting goods without an e-way bill. The
tax authorities imposed a penalty under Section 129 of the GST Act, which deals with detention,
seizure, and release of goods and conveyances in transit. The trader contested the penalty, arguing
that the absence of an e-way bill was unintentional.
Allahabad HC’s Ruling and Justification
The High Court dismissed the trader’s appeal and ruled in favor of the tax authorities, stating that:
 The generation of an e-way bill is mandatory once the goods are in transit.
 Goods transported without an e-way bill raise a presumption of tax evasion.
 Non-compliance with GST regulations justifies penalty proceedings under Section 129.
The court emphasized that procedural lapses like failing to generate an e-way bill cannot be
overlooked, as they hinder transparency and tax enforcement.
Implications of the Judgment

1. Strict Compliance for Businesses – Businesses must ensure proper documentation before
   transporting goods to avoid legal and financial consequences.
2. Increased Tax Enforcement – Authorities are likely to intensify inspections to curb tax
   evasion through improper documentation.
3. Financial Penalties for Violations – Any lapse in compliance can result in hefty penalties and
   potential seizure of goods.
   Conclusion
   The Allahabad High Court’s ruling in Gurunanak Arecanut Traders vs. Commercial Tax and Another
   serves as a stark reminder for businesses to adhere to GST regulations diligently. Failure to generate
   an e-way bill before transporting goods can lead to severe penalties, reinforcing the government’s
   stance on preventing tax evasion. Businesses must prioritize compliance to avoid legal disputes and
   operational disruptions.