Don't stop my truck - Let us take you out from The E-way Bill Saga

This is a story of everyone. You receive a call from the truck driver who is transporting your goods - "Saab, GST valo ne naake par gaadi rok di" (साहब, GST वालों ने नाके पर गाड़ी रोक दी). But why? Am I not e-way bill compliant? What did I do? Have I evaded tax? What should I do next? Whom should I approach?

We will reply to all your questions in this write-up.

1. The GST enforcement tracks the movement of trucks transporting goods through RFID devices on state borders and main chowks, and wherever they find discrepancies in the details available on the device, they stop the truck and start an inspection of documents and goods.

2. If the documents are not found in order, then the proceedings get started.

3. Kindly note the following things: 

a. For the transportation of goods having a value of more than ₹50,000, or in the case of interstate supply, or if the distance is more than 10 km and it's through a motorized conveyance, a valid e-way bill is required along with accompanying documents, i.e. invoice, delivery challan, debit note, etc.b. The transported goods must match the details in the invoice and the e-way bill.c. The e-way bill must contain correct details of the goods and the vehicle. Goods must match in description and quantity with the details mentioned in the e-way bill.d. The vehicle must be on the right route, in the right direction, and within the right time limits as mentioned in the e-way bill.

If these things are found correct, then there will be no issue; otherwise, goods will be detained and penalties will be imposed.

4. If there are minor mistakes in the e-way bill, like a mismatch in vehicle number (e.g., instead of typing 1234, it is typed as 1243), or wrong pin codes (e.g., instead of 131001, it is typed as 131100), then such mistakes can be considered acceptable, and a minimum penalty of ₹1,000 (CGST ₹500 + SGST ₹500) will be imposed. Otherwise, for mistakes like discrepancies in the quantity of goods (e.g., 500 units are transported but the e-way bill mentions 50 units) or in the description of goods, penalties will be imposed as per Sections 129 and 130 of the CGST Act, 2017.

5. There are some tips if your vehicle gets stopped by enforcement agencies:

a. Always ensure that the driver of the vehicle has a basic understanding of the documents and goods being transported. Sanitization of vehicle staff is necessary. Give training to the drivers and transport personnel on how to interact with officers and present documents. Provide clear instructions on carrying physical or digital copies of e-way bills and invoices. They should be educated to present QR codes for on-spot verification.

b. When a vehicle is detained, time is of the essence. Being prepared with documentation and a representation strategy can prevent prolonged disruption. Assign a compliance officer or authorized signatory to respond quickly to GST authorities.

c. Cooperate with the officer and answer all his queries in detail and to the point.

d. Ensure that someone (CA or Advocate) is available as backup to attend to the authorities.

e. If the MOV-01 form has been issued, attend the personal hearing and submit your replies in writing.

f. Ensure that the entire process is completed within the prescribed time limits.

g. In case of vehicle breakdown, route diversions, wrong routes, or any other reasons for change or delay in vehicle movement-such as strikes, health issues, or natural calamities-these must be documented through photographs, videos, or news clippings and should be produced before the officer for adjudication.

6. Yes, it is mandatory to pay the penalty or provide a surety bond to get the goods released. Afterwards, if you are not satisfied, you can approach the appellate authorities against the order passed in Form MOV-07.

7. During the e-way bill proceedings, if you feel that your rights have been violated, then it is advisable to approach the court through writ jurisdiction.

8. Kindly note that to invoke e-way bill proceedings, it is quintessential that there must be tax evasion. To prove tax evasion, the onus is on the enforcement officer.

Common issues based on practical experience, where e-way bill cases are booked

a. Vehicle is on the wrong route

b. Vehicle number is not correct in E-Way Bill (may be due to a typing error or change in vehicle not reported)

c. Discrepancies in the invoice, like litres mentioned as kilos, pieces mentioned as numbers, etc.

d. Delivery challan issued instead of an e-invoice.

e. Invoices issued below/above the market value of goods (under/over-invoicing)

f. Vehicle moving after the expiry of the e-way bill

g. Issues in "Bill to-Ship to" invoices

h. Supplier's GST number is suspended, but he has issued the e-way bill

Reforms Required

The whole e-way bill mechanism operates on the whims and fancies of the enforcement agencies. It is rightly said that in the e-way bill saga, "sadak par khada inspector khuda hota hai" (सड़क पर खड़ा इंस्पेक्टर खुदा होता है). It is high time to bring reforms to the entire e-way bill mechanism. We have some suggestions for the government to improve the system:

1. Introduce a fast-track appellate mechanism in e-way bill cases

2. Amendment in Section 129 and add word tax evasion thereof.

3. Do not detain trucks on the road; instead, issue a show cause notice for the discrepancies and adjudicate within the department. Release the truck and goods immediately after collecting all the evidences.

4. Reduce the penalties. Penalty rates of 200% are extremely high

5. In cases of serious violations, higher penalties can still be imposed

Key Legal Provisions - Sections of CGST Act, 2017

Section 68 of the CGST Act mandates that any person in charge of a conveyance carrying goods above a specified value must carry prescribed documents (such as invoice and e-way bill) and furnish required information before commencing movement. This ensures traceability and reduces tax evasion during transportation.

Section 129 deals with the detention and seizure of goods and vehicles in case of non-compliance with GST provisions during transit.

• If the owner appears, goods are released on payment of tax and 100% penalty.
• If the owner does not appear, release is subject to tax and penalty equal to 50% of the value of goods.
• Alternatively, provisional release is permitted against a bond and bank guarantee.

Section 130 empowers officers to confiscate goods and vehicles in cases of deliberate tax evasion-such as unaccounted goods, unregistered supply, or misuse of conveyance. The person is liable to pay tax, penalty, and fine (which can go up to the market value of goods, excluding tax), with a minimum liability equal to 100% of the tax involved. Importantly, confiscation can only proceed after issuance of a Show Cause Notice and providing the party a reasonable opportunity of being heard.

There is an important circular granting relief in E-Way Bill Cases -Circular No.64/38/2018-GST dated 14th September, 2018

It states that in minor discrepancies in the details mentioned in the e-way bill and there are no major lapses in the invoices accompanying the goods in movement, Penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment.

Minor discrepancies stated above are listed below: 

(a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;

(b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill;

(c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;

(d) Error in one or two digits of the document number mentioned in the e-way bill;

(e) Error in 4 or 6-digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;

(f) Error in one or two digits/characters of the vehicle number.

Judicial Approach

E-Way bill cases lacks human approach and highest penalty always be imposed but the judiciary has consistently emphasized intention to evade tax as a critical factor in imposing penalties under Section 129. Courts emphasis on Doctrine of Proportionality which states that to quash disproportionate penalties for minor errors such as clerical mistakes. Some of the important case laws cited below: 

M/s Hindustan Herbal Cosmetics Vs State of U.P. (2022)

In the e-way bill there was a difference of three digits in the truck number, instead of the permitted two digits (as per Government circular) and same appeared to be a typographical error in the e-way bill without any further material to substantiate intention to evade tax. Held that where no intent to evade tax is established and all essential documents like invoice and e-way bill are available, detention is unjustified.

Vishnu Singh Vs State of UP Writ Tax No. 599 of 2024, decided on 20-2-2025

Purpose of e-way bill is only to inform department about movement of goods. Where no discrepancy found in quality, quantity or description of goods and no finding recorded regarding intention to evade tax, mere technical error in e-way bill cannot justify penalty. Hence the Impugned orders quashed.

U.S. Metal Products vs. State of U.P. Writ Tax No. 1272 of 2022, decided on 8-4-2025

Goods were in transit when same were intercepted and a discrepancy in e-way bill was pointed out as tax invoice number 3096 was mentioned in place of 3063, however no other discrepancy was pointed out with regard to quality, quantity or difference of items as mentioned in accompanying documents. Circular No. 64/38/2018, dated 14-9-2018 states that if there is any error in one or two digits, proceedings under section 129 of CGST Act should not be initiated - Therefore, entire proceedings itself were not sustainable in eyes of law and impugned orders were to be set aside.

Summary of FORM MOV Series under GST

The MOV forms are used by GST officers during interception, verification, and detention of goods in transit under Section 129 of the CGST Act, 2017. Each form serves a specific purpose in the procedural chain:

Disclaimer: The above write up is on the basis of experience, struggles, failures and knowledge of the authors. The views expressed above are personal in nature and don't have any intention to demean anybody and finding faults in any system. The only motive is to make the taxpayers aware and cautious while complying with the tax law.

The authors can also be reached at gaauravarya@gmail.com and bedisambhav24@gmail.com