GST Penalty Quashed: Technical Error in E-Way Bill Not Enough for Punishment in Export Case

In the case of Karmic International v. Additional Commissioner, Allahabad High Court

July 30, 2025

Under the GST law, whenever goods are transported, an e-way bill is required. This document has two parts:

• Part-A: Contains details of the goods (value, GSTIN, invoice, etc.)
• Part-B: Contains vehicle details (to track movement of goods)

In the present case Karmic International was exporting textile machinery spare parts from New Delhi to Bangladesh. The goods were stopped during transit because Part-B of the e-way bill was not filled in.

If Part-B is not filled, the e-way bill is considered incomplete, and goods can be detained, with penalties imposed under Section 129 of the CGST Act. The intention is to prevent evasion of tax through untraceable movement of goods.

The Question arises in this case - Can a penalty be imposed under GST law merely for non-filling of Part-B of the e-way bill, even when goods are actually exported and no tax loss has occurred?

The court held that non-filling of Part-B was merely a technical or procedural lapse, not a substantial breach or fraudulent intent. If there is no loss of tax and the movement is genuine, then imposing a penalty defeats the purpose of the law. Thus, the court ruled in favour of Karmic International and Penalty was quashed.