Facts of the Case

M/S Millennium Impex Pvt. Ltd., a registered company holding GSTIN No. 07AACCM3279J1Z8 and dealing in metal-seated zero-leakage Ball Valves, supplied a Rotor Assembly Elmo and Complete Assy-CL 3001 to NTPC Ltd's Ramagundam Super Thermal Power Station in Telangana under Tax Invoice No. 0000781/19-20 dated 14.8.2019. While the goods were in transit from New Delhi to Telangana via Agra, Uttar Pradesh, they were intercepted on 16.8.2019, and physical verification revealed that Part-B of the accompanying e-way bill had not been filled. A show-cause notice proposed 18% tax of Rs.14,63,063/- along with an equal penalty under Section 129(3) of the CGST Act read with Section 20 of the IGST Act. The petitioner deposited the tax and penalty, secured release of the goods, and later challenged the penalty order in appeal, which was dismissed on 31.8.2020, leading to this writ petition.

Issues Involved

  1. Whether seizure and penalty under Section 129(3) of the CGST Act were valid merely because Part-B of the e-way bill was left blank, absent any recorded finding of intent to evade tax.
  2. Whether the petitioner could raise, for the first time at the hearing, an "absence of intent to evade tax" argument that was not specifically pleaded in the writ petition.
  3. Whether the CBEC Circular dated 14.9.2018, exempting certain technical lapses from Section 129 proceedings, applied to the facts of this case.

Petitioner's Arguments

  • The goods moved between two registered dealers under genuine tax invoices, GR and an e-way bill; the lapse was a technical glitch that should not have triggered seizure.
  • Filling Part-B was the transporter's responsibility, not the petitioner's, so proceedings were wrongly initiated against the consignor for a third party's omission.
  • No finding of intent to evade tax had been recorded by the authorities, without which the harsher consequences under Section 129 could not be justified.
  • Reliance was placed on Ram Dev Trading Company, VSL Alloy (India) Pvt. Ltd., M/s Citykart Retail Pvt. Ltd., and Shyam Sel and Power Ltd., and on CBEC Circular dated 14.9.2018 (para 5(f)), to argue that a mere technical lapse should not attract penalty.

Respondent's Arguments

  • It was undisputed that Part-B of the e-way bill was blank at interception, a clear contravention of Rule 138 justifying the proceedings.
  • The petitioner never explained, even in the show-cause reply, why Part-B was left blank; immediate payment of tax and penalty to secure release itself indicated the contravention.
  • The circular relied upon does not override Section 129, and none of its exempted categories under para 5(a)-(f) covered the petitioner's case.
  • The petitioner never specifically challenged the appellate authority's findings of fact in the writ pleadings, so those findings must be treated as final.

Court Order/Findings

  • The Court noted that Part-B of the e-way bill was admittedly blank at interception, and the petitioner offered no explanation at any stage — show-cause reply, appeal, or writ petition — for the lapse.
  • Findings of fact recorded against the petitioner by the authorities below were never specifically assailed in the writ pleadings, and a party cannot argue a case beyond its own pleadings, relying on Bachhaj Nahar v. Nilima Mandal, (2008) 17 SCC 491, and Bharat Singh v. State of Haryana, (1988) 4 SCC 534.
  • The "no intent to evade tax" argument was never pleaded in the writ petition itself and could not be raised for the first time at the bar.
  • Each detention and penalty case must be assessed on its own facts, and the case law relied upon by the petitioner did not assist him.
  • The writ petition was dismissed and the penalty order under Section 129(3) of the CGST Act was upheld.

Important Clarification

  • A writ petitioner cannot argue grounds — such as absence of intent to evade tax — that were never specifically pleaded in the writ petition, even if raised generally at the bar.
  • Findings of fact recorded by tax authorities that go unchallenged in the writ pleadings, and undisputed in the absence of a rejoinder affidavit, will ordinarily be treated as binding on the assessee.
  • An unexplained blank Part-B of an e-way bill, with no justification offered at any stage, can by itself sustain proceedings and penalty under Section 129(3) of the CGST Act, notwithstanding CBEC's exemption circular, which the Court found inapplicable on facts.

Sections Involved

  • Section 129(3), CGST Act, 2017 — provides for detention, seizure and penalty for goods transported in contravention of the Act, including incomplete e-way bill documentation.
  • Section 20, IGST Act, 2017 — applies CGST provisions, including Section 129, mutatis mutandis to inter-State movement of goods under the IGST framework.
  • Rule 138A, CGST Rules, 2017 — prescribes the documents, including a valid e-way bill with Part-B, required to accompany goods in transit.
  • Section 122, CGST Act, 2017 — lists offences attracting penalty, referenced by the petitioner to argue that non-filling of Part-B was not a listed violation.

Decision – In Favour of

The writ petition was dismissed and the penalty order was upheld in full. The decision is in favour of the Department.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: WRIT TAX No. 721 of 2020
  • CNR: Not available on record
  • Coram: Hon'ble Piyush Agrawal, J.
  • Decision Date: 18.10.2023
  • Disposal Nature: Dismissed; penalty order under Section 129(3) CGST Act for e-way bill Part-B non-compliance upheld

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