🏛️ Allahabad High Court Quashes Penalty on Deepam Packaging Over
Alleged Reuse of E-Way Bill
Introduction
The Allahabad High Court
recently ruled in favor of M/S Deepam Packaging and Food Private Limited,
a Kanpur-based company, in Writ Tax No. 885 of 2023, decided by Justice
Piyush Agrawal on 4th November 2025.
The case revolved around
a penalty imposed under Section 129(3) of the GST Act for allegedly
reusing the same e-way bill during goods transport. The court found that the
authorities failed to conduct a proper investigation before penalizing the
company and therefore quashed the penalty and seizure orders.
Background
of the Case
M/S Deepam Packaging and
Food Pvt. Ltd. is engaged in manufacturing and selling packing materials like
printed laminated rolls and pouches.
In the normal course of
business, the company received an order from M/S Aaditri Enterprises,
Varanasi, which is a registered dealer under GST.
- The goods were loaded on Vehicle
No. UP 78 FN 5456.
- The transport was supported by a valid
tax invoice, bilty, and an e-way bill (valid up to 3rd
February 2023).
- The goods were being transported from
Kanpur to Varanasi.
However, on 4th
February 2023, the vehicle was intercepted by GST officials, and the
goods were detained on the ground that the same e-way bill and documents
had been reused.
Petitioner’s
Submission
The company explained
that:
- The vehicle had broken down
during transit, and after necessary repairs, it resumed the journey using
the same documents.
- The allegation of “reuse of e-way
bill” was completely false and baseless.
- The authorities did not make any
inquiry from the purchasing dealer or the toll plaza authorities
to verify the claim.
- The department simply relied on toll
data showing that the vehicle had earlier crossed Handia Toll Plaza
on 1st February 2023 and later on 3rd February 2023, without
verifying when and how the vehicle returned to Kanpur.
The petitioner argued
that without proper verification or investigation, no penalty could be imposed.
They relied on a similar
case — M/s Anandeshwar Traders vs. State of U.P. (Writ Tax No. 503 of 2020)
— where the Allahabad High Court had set aside a seizure for lack of proper
inquiry in a “reuse of e-way bill” allegation.
Respondent’s
Submission
The government’s counsel
argued that:
- The company intentionally reused the
same e-way bill to evade tax.
- Had the goods not been seized, the
petitioner would have succeeded in misusing the documents.
They claimed that the
penalty was justified under the GST provisions.
Court’s
Observations
After hearing both sides,
the court made the following key observations:
1. No
Proper Inquiry Conducted: The authorities alleged document
reuse but did not verify the facts. They failed to check:
o When
the vehicle actually returned to Kanpur, or
o Whether
the goods were reloaded before resuming the journey.
2. Reference
to Previous Judgment: The court referred to its earlier
decision in M/s Anandeshwar Traders, which clearly stated that in the
absence of any investigation proving reuse of e-way bills, seizure or penalty
cannot be justified.
3. Failure
to Prove Intent to Evade Tax: There was no concrete
evidence to show that Deepam Packaging had intended to evade tax.
Judgment
and Decision
Based on the facts and
legal precedents, the Allahabad High Court ruled that:
- The allegation of reusing e-way
bill documents was not supported by any proper investigation or
evidence.
- The seizure and penalty orders were illegal
and unjustified.
- Both orders dated 4th February
2023 (in Form GST MOV-06) and 31st May 2023 (appellate order)
were quashed.
- The writ petition was allowed,
and the court directed that any amount deposited by the petitioner should
be refunded as per law.
Conclusion
This judgment reinforces
an important principle: no penalty can be imposed under GST without proper
verification and evidence. The authorities must conduct thorough inquiries
before alleging misuse of e-way bills.
M/S Deepam Packaging and
Food Pvt. Ltd. was vindicated as the High Court ruled that mere assumptions or
toll data cannot be used to penalize a taxpayer without factual proof.
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