Trimble Mobility Solutions India Private Limited Vs State of Up And 2 Others (Allahabad High Court)

Facts and Procedural HistoryThe case of Trimble Mobility Solutions India Private Limited Vs State of Up And 2 Others addressed the central question of whether the technical expiry of an e-way bill during transit, resulting from unforeseen exigencies, can be construed as an intention to evade tax under the Goods and Services Tax (GST) regime, justifying the imposition of a penalty under Section 129(3) of the GST Act.The petitioner, Trimble Mobility Solutions India Private Limited, is a company registered under GST and engaged in providing vehicle tracking services across India. The dispute arose during the transport of GPS devices being delivered under a contract with the National Geo-Spatial Data Centre, a department under the Surveyor General of India. The goods were accompanied by a genuine tax invoice and an e-way bill that was valid for 12 days and set to expire on December 20, 2022.During the journey, the transport vehicle suffered a breakdown. The driver, without immediately informing the petitioner, attempted a repair but failed and subsequently shifted the goods into a different vehicle. Due to this breakdown and the necessary transshipment, the movement of goods was delayed, and the original e-way bill expired on December 20, 2022.The goods were intercepted by the authorities while moving with the expired e-way bill. Crucially, before the respondent passed the detention order under Section 129(3) of the GST Act on December 27, 2022, the petitioner had already generated a new e-way bill on December 22, 2022. The initial detention order was upheld by the appellate authority on June 17, 2023, prompting the petitioner to file a writ petition before the Allahabad High Court challenging both impugned orders.Arguments and Judicial PrecedentsThe petitioner argued that the delay was caused by a genuine, unavoidable operational exigency—the vehicle breakdown—and the subsequent transshipment. They maintained that the presence of the original, valid tax invoice and the immediate generation of a new e-way bill, even after interception but before the final order, clearly demonstrated a lack of intent to evade payment of tax.In support of this argument, the petitioner relied heavily on judicial precedents, including the judgment of the Apex Court in Assistant Commissioner (ST) Vs. Satyam Shivam Papers Private Limited (2022 (57) GSTL 97 (SC)). They also cited a string of recent and consistent rulings by the Allahabad High Court itself, reinforcing the principle that technical non-compliance without malafide intent cannot lead to penalties under Section 129, specifically:Conversely, the State respondents argued that had the goods not been detained, the petitioner might have succeeded in evading tax. They contended that, assuming the breakdown was genuine, the petitioner should have generated the new e-way bill before the commencement of the onward journey, thus violating the strict provisions of the Act and Rules.Court’s Holding and RatioAfter reviewing the facts, the Allahabad High Court acknowledged several undisputed points: the contract with a government entity was genuine, the tax invoice was valid, the original e-way bill was genuine, the vehicle breakdown was not disputed by the respondents, and a new e-way bill was generated before the Section 129(3) order was issued.Relying on the long-standing judicial view established in the cited precedents, the Court categorically stated that the expiry of the e-way bill will not, in itself, attribute an intention to evade payment of tax. The Court found that the facts of the present case were squarely covered by the principles laid down in its prior rulings. The core judicial ratio is that proceedings under Section 129(3) are primarily focused on the intent to evade tax, and a delay caused by a genuine vehicle breakdown and subsequent transshipment, when accompanied by a valid tax invoice and corrected via a new e-way bill, does not demonstrate such malafide intent.Consequently, the Court concluded that the detention and penalty orders passed by the authorities could not be sustained in the eyes of law. The writ petition was allowed, and the impugned orders of the adjudicating and appellate authorities were quashed.