E-Way Bill Under GST: From Compliance to Adjudication
A Legal Perspective for Tax Professionals
26TH MARCH, 2026 | LIVE AT 4:00 PM | YOUTUBE: GSTPANACEA
Speaker
Adv. Zalak S. Dalal, Surat
Practicing Advocate – GST & Income Tax
B.Com, LL.B., LLM
9099430572, 9428280364
advocatezalakdalal@gmail.com
This session covers the complete lifecycle of E-Way Bill compliance — from generation and exemptions to interception, adjudication, and litigation strategy — equipping tax professionals with actionable legal insights.
Agenda
01
Introduction & Conceptual Framework
02
Legal Provisions & Framework
03
Applicability & Exemptions
04
E-Way Bill Generation Process
05
Practical Compliance Challenges
06
Inspection, Interception & Detention
07
Penalty & Consequences
08
Adjudication Process
09
Judicial Developments & Case Laws
10
Litigation Strategy for Professionals
11
Appeal Mechanism
12
Practical Case Study
13
Compliance Checklist & Best Practices
14
Key Takeaways & Conclusion
"Is E-Way Bill merely a procedural requirement or a litigation trigger?"
Minor Error
Detention under Section 129
Expired EWB
Penalty under Section 129
Technical Glitch
Litigation under Sec 129/130
Yes — It is a procedural requirement. But failure to comply with this procedural requirement triggers litigation. The stakes are far higher than most businesses realize.
CHAPTER 1
Introduction & Conceptual Framework
What is an E-Way Bill?
Electronic document for movement of goods
When is it Required?
Goods exceeding ₹50,000 in value
Who Prepares It?
Consignor, consignee, or transporter
Effective Date
Inter-State: 01.02.2018
What is an E-Way Bill?
Waybill Definition
A document issued by a carrier which gives details and instructions relating to the shipment of a consignment of goods — showing names of consignor and consignee, origin, destination, and route.
Official Shipping Document
An official shipping document that travels with a shipment, identifies its consignor and consignee, describes the goods, and shows their weight and freight. Prepared by the shipping company for internal record and control — it is neither a contract of carriage nor a negotiable instrument.
When is an E-Way Bill Required?
An E-Way Bill is an electronic way bill for movement of goods generated on the GSTN Portal. Movement of goods exceeding ₹50,000 in value is prohibited without generation of an E-Way Bill by a registered person. It must be generated before commencement of movement for the following reasons:
In Relation to Supply
Standard taxable supply of goods between registered parties
Reason Other Than Supply
Job work, branch transfers, returns, exhibitions, etc.
Due to Inward Supply from Unregistered Person
Recipient is responsible for EWB generation
Who Has to Prepare? — Rule 138(2)
Consignor
Consignee
Who Prepares
Registered
Registered
Consignor / Consignee/ Transporter
Registered
Unregistered
Consignor / Transporter
Unregistered
Registered
Consignee / Transporter
Unregistered
Unregistered
Not to be prepared
Effective Date of E-Way Bill Provisions
Inter-State Movement
01.02.2018
Notification No. 15/2018 – Central Tax dt. 23-03-2018
Intra-State — Gujarat
01.02.2018
Notification No. 74/2017-State Tax dt. 29.12.2017
Role in GST Compliance Ecosystem
Movement Authorization
Validates that goods worth more than ₹50,000 are transported legally — for sale, branch transfer, or job work.
Tax Evasion Prevention
Links movement of goods directly to invoices and challans, making it difficult to move goods without proper tax documentation.
Digital Audit Trail
Creates a traceable electronic record for real-time tracking, verification, and post-movement reconciliation by tax authorities.
Auto-population of Returns
EWB data can auto-fill GSTR-1, reducing manual data entry and errors in outward supply returns.
Compliance Enforcement Mechanisms
Verification in Transit
Tax officials can intercept vehicles to verify the EWB Number (EBN) or
QR code physically or
through RFID readers.
System-Level Blocking
As of 2026, the portal automatically blocks EWB generation for taxpayers who fail to file GST returns for Two consecutive periods.
Validity Constraints
Time-Bound: 1 day for up to 200 km for regular cargo.
Invoice Age: Bills only for invoices within last 180 days.
Ex- Invoices dated earlier than 5 July 2024 will not be eligible for e-way bill generation from 1 January 2025 Extension Cap: Total extensions capped at 360 days from original generation. Ex- E-way bill generated on 1st January, 2025 can only be extended until 25th December, 2025.
CHAPTER 2
Legal Provisions & Framework
Key Sections
Key Rules
Applicable CGST Rules — Quick Reference
Rule
Description
138
Information to be furnished prior to commencement of movement of goods and generation of e-way bill
138A
Documents and devices to be carried by a person-in-charge of a conveyance
138B
Verification of documents and conveyances
138C
Inspection and verification of goods
138D
Facility for uploading information regarding detention of vehicle
138E
Restriction on furnishing of information in Part A of FORM GST EWB-01
Relevant Forms for E-Way Bill in GST
Form No.
Rule
Particulars
GST EWB-01
138
Eway Bill
GST EWB-02
138
Consolidated E-Way Bill
GST EWB-03
138C
Verification Report
GST EWB-04
138D
Report of Detention
GST INV-1
138A
Generation of Invoice Number
GST MOV-01
—
Statement of Owner / Driver / Person in Charge of Goods and Conveyance
GST MOV-02
—
Order for Physical Verification / Inspection of the Conveyance, Goods and Documents
GST MOV-03
—
Order of Extension of Time for Inspection Beyond Three Working Days
GST MOV-04
—
Physical Verification Report
GST MOV-05
—
Release Order
GST MOV-06
—
Order of Detention U/S 129(1) of CGST / Sec 20 of IGST Act
GST MOV-07
—
Notice u/s 129(3) of CGST Act, 2017 / Under Section 20 of IGST Act
GST MOV-08
—
Bond for Provisional Release of Goods and Conveyance
GST MOV-09
—
Order of Demand of Tax and Penalty
GST MOV-10
—
Notice for Confiscation of Goods or Conveyance and Levy of Penalty under Section 130 of CGST/SGST/UTGST/IGST/GST (Compensation to States) Act, 2017
GST MOV-11
—
Order of Confiscation of Goods and Conveyance and Demand of Tax, Fine and Penalty
CHAPTER 3
Applicability & Exemptions
Under GST Law, a registered person intending to initiate movement of goods of value exceeding ₹50,000 must generate an E-Way Bill.
While the value threshold and certain exemptions vary state-to-state for intra-state movement, rules on distance limits and validity are uniform across India.
Minimum Distance Limit & Validity Rules
50 km Rule (Part-B)
If distance between consignor and transporter is less than 50 km within the same state, Part-B (vehicle details) is not mandatory. However, Part-A must still be filled.
Beyond 50 km → Vehicle number (Part-B) is compulsory.
Validity Based on Distance (From 01-01-2021)
Distance
Validity
Up to 200 km
1 day
Every additional 200 km
+1 day
180 km → 1 day
250 km → 2 days
430 km → 3 days
This validity rule applies uniformly across all states in India.
State-Wise E-Way Bill Thresholds
State / UT
Intra-State Threshold
Inter-State Threshold
Key Notes
Andhra Pradesh, Assam, Haryana, Karnataka, Odisha, Telangana, UP, Uttarakhand, West Bengal
₹50,000
₹50,000
Standard rule
Bihar, Delhi, Jharkhand, Madhya Pradesh, Maharashtra, Punjab
₹1,00,000
₹50,000
Higher intra limit
Rajasthan
₹2,00,000 (within city) / ₹1,00,000 (other intra)
₹50,000
Special rule
Tamil Nadu
₹50,000–₹1,00,000
₹50,000
Higher intra
Kerala
₹50,000
₹50,000
Special rules for gold
Gujarat
₹50,000
₹50,000
Intra-city exemptions
Union Territories
₹50,000
₹50,000
Standard
Special State-Specific Rules
Rajasthan
₹2 lakh threshold for movement within the same city; ₹1 lakh for other intra-state movement.
Gujarat
No e-way bill required for intra-city movement. Required for specific goods within the state.
Jammu & Kashmir
No intra-state e-way bill requirement. Required only for interstate movement.
Kerala
Special provisions apply for gold movement e-way bill.
50km
Key Operational Threshold
Part-B vehicle details not mandatory below this distance within same state
₹50K
National Interstate Threshold
Uniform across all states for inter-state movement
200km
Per Day Validity Rule
Uniform validity calculation across India from 01-01-2021
Exemptions from E-Way Bill Generation — Rule 138(14)
Goods-Based Exemptions
Movement-Based Exemptions
(with delivery challan)
Annexure Goods — Notification No. 12/2018
No.
Description of Goods
1
Liquefied petroleum gas for household & non domestic exempted category (NDEC) customers
2
Kerosene oil sold under PDS
3
Postal baggage transported by Department of Posts
4
Natural or cultured pearls and precious/semi-precious stones; precious metals (Chapter 71)
5
Jewellery, goldsmiths' and silversmiths' wares (Chapter 71) — excluding Imitation Jewellery (7117) — inserted w.e.f. 26-12-2022
6
Currency
7
Used personal and household effects
8
Coral, unworked (0508) and worked coral (9601)
CHAPTER 4
E-Way Bill Generation Process
Purposes for Generation
Reason available for Selection
Parts of E-Way Bill
Part A: GSTIN of Supplier & Recipient, Place of Delivery,
Document Number & Date,
Value of Goods,
HSN,
Reason for Transportation
Part B: Mode of Transport,
Vehicle Details — Vehicle Number for Road;
Transport Document No. / Defence / Temporary / Nepal or Bhutan Vehicle Registration No.
Who Should Generate the E-Way Bill?
Option A: Consignor or Consignee — Rule 138(2)
Where goods are transported by the registered person (as consignor or consignee) — whether in own conveyance, hired, by rail, air, or vessel — the said person may generate EWB in Form GST EWB-01 after furnishing Part B details.
For rail/air/vessel, the serial number and date of Railway Receipt / Air Consignment Note / Bill of Lading must also be furnished.
Option B: Transporter — Rule 138(3)
Where EWB is not generated under sub-rule (2) and goods are handed over to a transporter for road transport, the registered person furnishes transporter details in Part B, and the transporter generates the EWB on the portal based on Part A information provided.
Transporter's Duty & Cancellation Rules
Transporter's Duty — Rule 138(7)
Where neither consignor nor consignee has generated EWB and goods value exceeds ₹50,000, the transporter shall generate Form GST EWB-01 on the basis of invoice/bill of supply/delivery challan, and may also generate a consolidated EWB in Form GST EWB-02 prior to movement.
Cancellation — Rule 138(9)
An EWB may be cancelled electronically within 24 hours of generation if goods are not transported or not transported as per EWB details.
Exception: Cannot be cancelled if already verified in transit under Rule 138B.
The unique number generated is valid for 72 hours for updation of Part B.
Validity of E-Way Bill — Rule 138(10)
Before 01-01-2021
Distance
Validity
Up to 100 km
1 day
Every 100 km or part
+1 day
Up to 20 km (ODC/multimodal shipment)
1 day
Every 20 km or part (ODC)
+1 day
From 01-01-2021 (Current)
Distance
Validity
Up to 200 km
1 day
Every 200 km or part
+1 day
Up to 20 km (ODC/multimodal)
1 day
Every 20 km or part (ODC)
+1 day
Validity may be extended within 8 hours from the time of expiry. Under exceptional circumstances (e.g., trans-shipment), the transporter may extend validity by updating Part B. Each day is counted as 24 hours from the time of generation.
ODC = OVER DIMENSTIONAL CARGO
Deemed Acceptance & EWB Blocking
Deemed Acceptance — Rule 138(11)
Where the person to whom EWB information has been made available does not communicate acceptance or rejection on the common portal, it shall be deemed that he has accepted the said details.
Restriction on EWB Blocking — Notification No. 79/2020
W.e.f. 20-03-2020, Rule 138E was amended to insert a proviso: the restriction on EWB generation (for non-filers) did not apply during 20-03-2020 to 15-10-2020 for returns not furnished for February 2020 to August 2020 (COVID relief measure).
CHAPTER 5
Practical Compliance Challenges
Common Data Entry Errors
Incorrect GSTIN, mismatch in invoice details, wrong HSN code, invalid PIN codes, wrong document type selection
Portal & Technical Issues
Duplicate EWB generation for same invoice; failure to cancel within 24 hours when movement cancelled or bill contains errors
Mismatch with Invoice/Documents
Incorrect vehicle number, expired validity, missing Part B details,
un-updated vehicle change mid-transit, understated distance leading to insufficient validity
CHAPTER 6
Inspection, Interception & Detention
Powers of Officers
Section 68 Inspection of goods in movement
The Government may require the person in charge of a conveyance carrying goods exceeding a specified value to carry prescribed documents and devices. Where any conveyance is intercepted by the proper officer, the person in charge shall produce the documents and allow inspection of goods.
Documents to be Carried — Rule 138A
Invoice/bill of supply/delivery challan; copy of e-way bill or EWB number (physically or via RFID); Invoice Reference Number (IRN) valid for 30 days from upload — in lieu of physical tax invoice.
Verification — Rule 138B
Commissioner may authorize proper officer to intercept any conveyance for EWB verification. RFID readers to be installed at key checkpoints. Physical verification requires Commissioner's authorization; specific intelligence-based checks can be done with approval.
Inspection Report — Rule 138C
Summary report in Part A of GST EWB-03 within 24 hours of inspection; final report in Part B within 3 days.
No re-verification of same conveyance in same state unless specific evasion intelligence received.
Key Circulars on Interception & Inspection
Circular 41/15/2018 — 13.04.2018
SOP for interception, inspection, detention, and release of goods and conveyances in transit
Circular 64/38/2018 — 14.09.2018
Minor discrepancies in e-way bills should NOT lead to harsh proceedings under Section 129
Circular 160/16/2021 — 20.09.2021
No need to carry physical copy of tax invoice where e-invoice generated; QR code with IRN suffices for verification
Notification 74/2018 — 31.12.2018
Introduced blocking of EWB generation for taxpayers failing to file GST returns for two consecutive tax periods
Gujarat Notification — 19.09.2018
No EWB for intra-city movement (any value); no EWB for intra-state movement of Hank, Yarn, Fabric, Garments for job work
Section 129 — Detention, Seizure & Release
Any person transporting or storing goods in transit in contravention of the Act — all such goods, conveyance, and documents shall be liable to detention or seizure.
Condition
Quantum of Tax & Penalty w.e.f. 01-07-2017
Quantum of Tax & Penalty w.e.f. 01-01-2022
Owner comes forward — Taxable goods
Tax + Penalty of 100% of tax payable
Penlaty 200% of tax payable
Owner comes forward — Exempted goods
2% of value of goods or ₹25,000 (lower)
2% of value of goods or ₹25,000 (lower)
Owner does NOT come forward — Taxable
Tax + 50% of value of goods (less tax paid)
50% tax or 200% tax payable (higher)
Owner does NOT come forward — Exempted
5% of value of goods or ₹25,000 (lower)
5% of value or ₹25,000 (lower)
Section 129(2) was omitted by Finance Act, 2021 w.e.f. 01-01-2022, removing the cross-reference to Section 67(6) for provisional release. Concept of Provisional release removed.
Section 129 — Key Procedural Amendments
Section 129(3) — Notice & Order Timeline
Before amendment: PO to issue notice and pass order — no time limit specified.
After amendment (w.e.f. 01-01-2022): PO must issue notice (MOV-07) within 7 days of detention/seizure specifying penalty payable, and pass order (MOV-09) within 7 days from service of such notice.
Section 129(6) — Disposal Timeline
Before amendment: If tax and penalty not paid within 14 days, Section 130 proceedings initiated.
After amendment (w.e.f. 01-01-2022): If penalty not paid within 15 days from receipt of order copy, goods/conveyance liable to be sold/disposed. Conveyance released on payment of penalty or ₹1 lakh, whichever is less.
Section 130 — Confiscation of Goods or Conveyances and Levy of
Penalty
Grounds for Confiscation Sec 130(1)
Where any person –
Supplies/receives goods to evade tax; fails to account for taxable goods; supplies without registration; contravenes Act to evade tax; uses conveyance in violation of Act. Exception: Vehicle owner not liable if violation occurred without knowledge or connivance.
Fine in Lieu of Confiscation — Sec 130(2)
Max fine: Market value of goods minus tax chargeable. Total fine + penalty must not be less than 100% of tax payable (amended w.e.f. 01-01-2022).
For hired conveyance: fine equal to tax payable on goods transported.
Legal Protections — Sec 130(4) to (7)
No confiscation without opportunity of being heard.
Title vests in Government upon confiscation.
Proper officer takes possession; police must assist if requested. Disposal within 3 months shall be done if fine not paid.
Key Amendment: The Non-Obstante Clause ("Notwithstanding anything contained in this Act") was removed from Section 130(1). Section 130 no longer overrides Section 129 and other sections of the CGST Act.
CHAPTER 7
Penalty & Consequences
Owner vs. Transporter Liability
Confiscation Scenarios
When vehicle or goods are confiscated under Section 130, one must identify which specific violation under Section 130(1) was committed that resulted in confiscation by the tax authority.
Tax, penalty, and fine must be paid according to Section 129 or 130 as applicable to the facts of the case.
CHAPTER 8
Adjudication Process
1
Notice, Reply & Order
After issuance of notice, an order is issued. It has been observed that even when a reply is submitted, the decision in the order often has no impact of the reply submitted — a critical practical concern.
2
Principles of Natural Justice
Sec 129(4): No penalty shall be determined without giving the person an opportunity of being heard. Sec 130(4): No confiscation order or penalty shall be issued without opportunity of being heard.
3
Practical Issues
Mobile squad officers often act on instructions from superior officers without applying independent judicial mind when representations are made by the owner of goods.
CHAPTER 9
Judicial Developments & Case Laws
Courts across India have consistently held that intent to evade tax is a prerequisite for harsh penalties under Sections 129 and 130.
Minor procedural lapses, technical glitches, and clerical errors do not automatically justify detention or confiscation.
Case Law 1: Dynamic Rubbers Pvt. Ltd. v. DCGST (2024)
GUJARAT HC | R/SCA NO. 17738/2023 | 24-10-2024
Where Part-B of e-way bill could not be generated due to technical glitches on portal and was subsequently generated after interception, with no intention to evade tax as goods were being transported post-customs clearance, minor lapse attracts penalty of ₹25,000 instead of ₹11 lakhs.
Facts: Petitioner imported rubber conveyor belt from China after payment of IGST. Part-A generated; Part-B could not be generated due to portal glitches. Goods intercepted; penalty of ₹11,08,150 confirmed.
Held: No intention to evade tax. Part-B generated after interception. Minor lapse — penalty of ₹11 lakhs not valid. Lesser penalty of ₹25,000 justified.
Case Law 2: Balkrishna Industries Ltd. v. Union of India (2026)
GUJARAT HC | R/SCA NO. 1903/2026 | 23-02-2026
Penalty for expiry/non-extension of e-way bill during transit of export goods quashed — delay of ~15 hours due to vehicle breakdown was procedural without intent to evade tax; for zero-rated supplies no tax was payable; detention penalty unsustainable; refund with interest directed.
Facts: Vehicle carrying export consignment intercepted ~15 hours after EWB expiry. Transporter could not extend EWB due to breakdown. Management unaware of expiry during transit.
Held: For zero-rated supplies, no tax is payable. Contravention being procedural without intent to evade — penalty computation failed. Impugned APL-04 orders quashed; refund with interest directed.
Case Law 3: VSL Alloys v. State of U.P. (2018)
ALLAHABAD HC | WRIT TAX NO. 637/2018 | 13-04-2018
Merely non-mentioning of vehicle number in Part-B cannot be ground for seizure of goods when there is no intention to evade tax and all documents accompany the goods.
Held: No intention to evade tax during intra-state sale. All documents accompanied goods. Seizure order and consequential show cause notice under Section 129(3) quashed. Revenue directed to release goods and vehicle. Notification No. 12/2018-C.T. not considered by respondent — order totally illegal.
Case Law 4: Hawkins Cookers Ltd. v. State of U.P. (2024)
ALLAHABAD HC | WRIT TAX NO. 739/2020 | 12-02-2024
Where raw material was accompanied with relevant invoices and bilty documents though four out of eight e-way bills had incorrect address (registered office instead of factory), mere technical error cannot result in imposition of harsh penalty.
Facts: Raw materials purchased from Maharashtra, stock-transferred to factory in Jaunpur. Eight EWBs generated; four incorrectly mentioned Kanpur (registered office) instead of Jaunpur (factory).
Held: No intention to evade tax. Goods accompanied with relevant invoices and bilty documents. Detention order quashed and set aside.
Case Law 5: Modern Traders v. State of U.P. (2018)
ALLAHABAD HC | WRIT TAX NO. 763/2018 | 09-05-2018
E-Way Bill generated after interception of goods but before seizure order — order passed before date indicated in interception memo — no justification in detaining and seizing goods.
Held: EWB and other documents clearly indicated goods belonged to registered dealer and IGST had been charged. Seizure order and consequential penalty order quashed. Authorities directed to release goods and vehicle.
Case Law 6: Creamline Dairy Products Ltd. v.
STO Chennai(2024)
MADRAS HC | W.P. NO. 12320/2022 | 20-11-2024
Failure to register additional place of business was a procedural irregularity — where there was no variance between quantity in invoice/EWB and actual goods seized, penalty under Section 129 was not sustainable.
Facts: Goods (Cow Ghee) and vehicle detained while transported from unregistered additional place of business to registered main factory. Revenue imposed 200% penalty despite proper EWB and invoice.
Held: Only procedural irregularity. No variance in quantity. Imposition of penalty would be harsh. Penalty order quashed.
Case Law 7: Synergy Fertichem Pvt. Ltd. v. State of Gujarat (2019)
GUJARAT HC | R/SCA NO. 4730/2019 | 23-12-2019
Snapshot
The Gujarat High Court clarified the critical distinction and relationship between Section 129 (detention and seizure) and Section 130 (confiscation) of the CGST Act, 2017.
Before 01-01-2022 scenario of Sec 129 and Sec 130 of CGST Act, 2017 interpretation in this matter.
.
Facts
Despite the petitioner promptly generating the e-way bill and showing proof of tax payment, authorities insisted on a fine in lieu of confiscation under Section 130
.
Facts
The petitioner, an importer of ceramic pigment ink, had paid the applicable IGST and customs duty at the time of import. Due to the perishable nature of the goods, they were transported from the airport without waiting for the e-way bill. The truck was detained solely for the absence of an e-way bill.
Decision
The High Court set aside the arbitrary invocation of Section 130, ruling that because tax had already been paid, there was no intent to evade tax, making the confiscation proceedings illegal.
Case Law 7: Synergy Fertichem Pvt. Ltd. v. State of Gujarat (2019)
GUJARAT HC | R/SCA NO. 4730/2019 | 23-12-2019
Key Ruling — Sections 129 & 130 are Mutually Exclusive:
Mutual Exclusivity
Sections 129 and 130 are mutually exclusive and independent of each other.
Intent Required for Sec 130
Section 130 (confiscation) is an "aggravated form of action" — can only be invoked if there is a clear intention to evade tax. Mere procedural lapses do not justify confiscation.
Sequential Application
Authorities should generally first resort to Section 129. Only if tax and penalty under 129 are not paid within stipulated period should Section 130 be invoked.
Decision
Tax had already been paid — no intent to evade. Arbitrary invocation of Section 130 set aside. Confiscation proceedings held illegal.
Case Law 8: Panchhi Traders v. State of Gujarat
GUJARAT HC | POST 01-01-2022 AMENDMENTS
Section 129 is a self-contained code for transit contraventions. Confiscation under Section 130 can be resorted to only on formation of a concrete opinion of intention to evade tax based on material evidence, not mere suspicion.
Held: After 2021 amendment, Section 129 is a complete code for goods in transit contraventions. Section 130 has grave consequences — goods vest in government. Both sections operate within their own contour, bridged only by element of 'intention to evade tax'. Confiscation cannot be resorted to on suspicion alone or on ipse dixit. Proper officer must examine genuineness of documents before forming opinion of intent to evade.
Case Law 9: Satyam Shivam Papers Pvt. Ltd. — Supreme Court (2022)
SUPREME COURT | SLP (C) NO. 21132/2021 | 12-01-2022
E-Way Bill expired a day earlier due to road blockage by political agitators — no fault or intent to evade tax — High Court order setting aside demand and penalty upheld. Cost enhanced from ₹10,000 to ₹69,000 against the Department.
Strictures against Departmental Officer: SC agreed with HC that it was a "blatant abuse of power." Officer's intent in inferring tax evasion merely because EWB expired a day earlier is questionable. His subsequent conduct of keeping detained goods in a relative's house for 16 days instead of designated place re-enforces questionable conduct. Cost enhanced by additional ₹59,000 — to be recovered from erring officer.
Minor Breach vs. Major Offence
Token Penalty for Minor Breaches
Circular No. 64/38/2018-GST dated 14-09-2018
Where consignment is accompanied with invoice and EWB, Section 129 proceedings may NOT be initiated for:
Applicable Penalty for Minor Breaches
Penalty of ₹500 each under Section 125 of CGST Act and respective State GST Act (₹1,000 under IGST Act) in Form GST DRC-07 for every consignment.
Major Offences
For major offences, proceedings under Section 129 or 130 can be exercised as per the facts of the case — with full tax, penalty, and fine implications.
CHAPTER 10
Litigation Strategy for Professionals
1
Handling Detention Cases
Read MOV forms thoroughly. Check whether allegation of tax evasion is specifically mentioned. Understand why order under Sec 129 or 130 was issued. Verify EWB and all documents required during transport.
2
Drafting Replies & Submissions
State the reason why EWB or required document was absent. Submit EWB, necessary documents, lorry receipt/freight bill. If EWB expired, explain the reason. Submit judicial pronouncements with similar facts applicable to your case.
3
Documentation & Defence Approach
Verify goods movement route and whether EWB was generated for that movement. Confirm tax is paid for outward transactions. Establish the bonafide and genuine nature of the transaction through all available documents.
CHAPTER 11
Appeal Mechanism
First Appeal — Section 107
Appeal to First Appellate Authority. Must be filed within 3 months from date of issuance of Form GST DRC-07. A delay of 1 month can be condoned.
Second Appeal — GSTAT — Section 108
Appeal to GST Appellate Tribunal (GSTAT). Must be filed within 3 months from date of First Appellate Authority order. Further 3 months delay can be condoned.
Important: State benches of GSTAT are currently not functional in India, meaning justice cannot be rendered by the Tribunal at present. This creates a significant gap in the appeal mechanism for taxpayers.
CHAPTER 12
Practical Case Study — Bill to Ship to Transaction
Situation: A (Gujarat) → B (Maharashtra) → C (Delhi)
A sells goods to B; B supplies to C. Direct delivery from A to C. Material stopped during movement and officer asks for invoice of B issued to C.
Issue 1: Invoice Timing
What is the time limit for B to issue invoice to C in a Bill to Ship to transaction?
Issue 2: Confidentiality
B does not want to disclose A's name to C. How to make invoice and E-Way Bill?
Issue 3: Expired EWB in City
Vehicle parked outside Ahmedabad (no day entry). EWB expired by the time vehicle enters city at night. Officer demands penalty.
Case Study — Solutions
1
Invoice Timing (Issue 1)
This is a sale on approval basis.
At the time of movement, B generates a Delivery Challan to C.
Tax Invoice by B to C can be generated at the time of making goods available to C — as per Section 31(1)(b) of CGST Act, 2017.
Circular 10/10/2017-GST clarifies goods moved for approval can be transported with delivery challans and EWBs; inter-state supplies attract IGST.
2
Confidentiality (Issue 2)
Generate EWB on Delivery Challan by selecting "Line Sales" as sub-type.
In Bill to Ship transaction: Bill From B — Dispatch From A's address — Bill To C — Ship To C's address. A's name is not disclosed to C.
3
Expired EWB in City (Issue 3)
Extend EWB validity before expiry.
If vehicle/goods intercepted, extension can be done within 8 hours after expiry — as soon as physical verification (MOV-04) is done and before MOV-07 (SCN) and MOV-09 (penalty order) are issued.
After 8 hours, portal blocks extension. If MOV-09 issued, file First Appeal before First Appellate Authority.
CHAPTER 13
Compliance Checklist & Best Practices
Preventive Measures
E-Invoice (where applicable)
Risk Mitigation Strategies
CHAPTER 14
Key Takeaways & Conclusion
Generate EWB
Where applicable, ensure EWB is generated to avoid litigation and do business without hurdles
Educate Clients
Educate clients about EWB generation and consequences of non-compliance
Collect MOV Forms
If order u/s 129 or 130 issued, collect copies of all MOV Forms immediately to save time when filing appeal
Update Registration
Update Additional Place of Business when dispatching goods from that place to avoid Section 130 consequences
Thank You
Speaker
Adv. Zalak S. Dalal
Practicing Advocate – GST & Income Tax
B.Com, LL.B., LLM
Surat, Gujarat
9099430572, 9428280364
advocatezalakdalal@gmail.com
Session Details
YouTube: GSTPANACEA
Date: 26th March, 2026
Time: 4:00 PM (Live)
"Where applicable, ensure E-Way Bill is generated to avoid litigation and do business without any hurdles."