Balkrishna Industries Limited Vs Union of India & Ors. (Gujarat High Court)
The petitioner challenged orders dated 29.11.2025 and 02.12.2025 passed under Form GST APL-04 by the Deputy Commissioner of State Tax, Rajkot, whereby penalty of ₹18,00,140/- was imposed under Section 129(1)(a) of the CGST Act, 2017 for expiry of an E-way bill during transit of exported goods. The petitioner also sought declaration that penalty for expiry of E-way bill in case of exported goods is not imposable and prayed for refund of the amount.
At the preliminary stage, the Court noted that though an appeal remedy before the GST Appellate Tribunal (GSTAT) existed, the issue raised was a pure question of law and was stated to be squarely covered by the decision of the Court in Marcowagon Retail Pvt Ltd vs. Union of India. Since it was informed that the GST Tribunal bench was not yet constituted, the Court proceeded to hear the matter. The State fairly submitted that the issue was covered by the aforesaid decision.
The Court referred to the earlier ruling in Marcowagon Retail Pvt Ltd, which dealt with transportation of goods in zero-rated supplies under Sections 5(1), 7(5), and 16(1) of the IGST Act, 2017, read with Rules 89 and 96 of the CGST Rules, 2017. The Court had held that although tax is leviable on inter-State supply, exports qualify as zero-rated supply and no tax is payable by the exporter. Where there is contravention of Rule 138 (relating to E-way bills), Section 129 provides for levy of penalty; however, in absence of any tax payable, computation of penalty would fail. In that case, considering the goods akin to exempted goods, the Court had reduced penalty to ₹25,000/-.
