GST Case Update: Part B of
E-Way Bill Mandatory — Allahabad High Court Upholds Penalty on M/s B M
Computers
Case Title: M/s
B M Computers vs. Commissioner Commercial Taxes and 2 Others
Case No.: Writ Tax No. 1559 of 2024
Court: Allahabad High Court
Date of Judgment: 10 April 2025
Background and Facts of the Case:-
M/s B M Computers, a
registered GST dealer (GSTIN: 09AEWPA1632E1ZN), is engaged in the business of
sale and purchase of computer hardware and related items. The case arose from a
stock transfer of goods from the petitioner’s Agra head office to its Ghaziabad
branch, involving two invoices valued at ₹8,45,000 and ₹1,43,500 (inclusive of
tax).
The consignments were
transported using M/s Shagun Logistics Cargo Services. During transit, the
vehicle was intercepted at Luharli Toll Plaza, Greater Noida, on 06.03.2023
at 3:16 AM by the State Tax Mobile Squad.
Upon inspection, it was
found that:
- Only Part A of the e-way bill
was filled.
- Part B,
which contains transporter details, was missing.
- It was later generated after
interception, at 4:28 AM the same day.
Moreover, one of the
invoices (ST/OUT/BMC/366) mentioned the destination as Agra to Agra,
whereas the goods were actually moving from Agra to Noida, indicating
discrepancy and lack of supporting documents.
A penalty was imposed
under Section 129(3) of the CGST/UPGST Act, 2017, and the petitioner
deposited the same to release the goods. The first appeal against the penalty
was dismissed on 30.05.2024. The petitioner then approached the High Court by
way of writ.
Petitioner’s Arguments:-
The petitioner contended:
- The goods were covered by valid
tax invoices.
- Part B
of the e-way bill was not updated due to a human error by the transporter,
and this omission should not attract penalty.
- The first appellate order was non-speaking,
lacking reasons and legal application.
- Reliance was placed on earlier
judgments:
- Varun Beverages Ltd. vs. State of
U.P.
- Falguni Steels vs. State of U.P.
- Indeutsch Industries Pvt. Ltd. vs.
State of U.P.
- Exch. Therm Engineering Co. vs.
State of U.P.
- Rawal Wasia Yarn Dying Pvt. Ltd. vs.
Commissioner Commercial Tax
These cases offered
relief in similar situations based on technical or minor lapses.
Respondent’s Arguments:-
The State, represented by
the Standing Counsel, strongly opposed the petition, arguing:
- The petitioner intentionally
omitted Part B to avoid initiating the e-way bill validity period,
facilitating potential tax evasion.
- The updated Part B was generated after
interception, which confirms post-facto compliance.
- The invoice claimed goods were moving
from Agra to Agra, while in reality, they were moving to Noida
— with no valid documentation for that route.
- Rule 138 of the CGST Rules, 2017,
mandates that both Part A and B must be completed before
commencement of movement of goods.
The respondent relied on:
- M/s Jhansi Enterprises vs. State of
U.P. (Writ Tax No. 1081 of 2019)
- M/s Akhilesh Traders vs. State of
U.P. (Writ Tax No. 1109 of 2019)
These decisions,
post-April 2018, establish that any movement without a complete e-way bill
raises a presumption of tax evasion, which the taxpayer must rebut with
valid material evidence.
Observations and Judgment:-
The High Court made the
following key observations:
1. After
the 14th Amendment to the UPGST Rules, which came into effect
on 01.04.2018, it is mandatory to carry a complete e-way bill
(i.e., both Part A and B) for movement of goods.
2. In
the present case:
o Part
B
was not filled at the time of interception.
o The
updated e-way bill was generated after the interception, confirming the
lapse.
o There
was a mismatch in destination between the invoice and actual movement.
3. As
held in Akhilesh Traders and Jhansi Enterprises, non-filing of
Part B gives rise to a presumption of tax evasion, and post-interception
compliance does not cure the violation.
4. The
Court held that the earlier judgments cited by the petitioner related to the pre-2018
period and were not applicable under the current regime where compliance
mechanisms are robust.
“Only downloading Part A
of the e-way bill and non-filling of Part B would not absolve the liability
under the Act.” — Allahabad High Court
Conclusion and Final Order:-
The Allahabad High Court
upheld the penalty imposed by the Assistant Commissioner and confirmed by the
Appellate Authority. The writ petition was dismissed.
“No case for interference
is made out. The writ petition fails and is hereby dismissed.”
Disclaimer: All
the Information is based on the notification, circular and order issued by the
Govt. authority and judgement delivered by the court or the authority
information is strictly for educational purposes and on the basis of our
best understanding of laws & not binding on anyone.
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