Allahabad High Court Quashes GST Seizure Order
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Case Details
- Case Name: RC Sales and Services vs. State of Uttar Pradesh and Others
- Court: Allahabad High Court
- Coram: Hon’ble Justice Piyush Agrawal
- Date of Order: 18 December 2025
- Writ Petition No.: Writ Tax No. 6706 of 2025
Background of the Case
The petitioner, RC Sales and Services, a proprietorship firm registered under the GST law, was engaged in the business of supplying threshing and crushing machinery. The firm received an order from M/s Baba Hans Construction Pvt. Ltd. and raised a valid tax invoice along with an e-way bill.
- Invoice Date & Value: 14 June 2023 – ₹15,71,674
- Mode of Transport: Truck No. UP14GT3383
- Transaction Nature: Bill-to Ship-to transaction
While the goods were in transit, the vehicle was intercepted by GST authorities on 19 June 2023.
Reason for Seizure by GST Authorities
The goods were seized under Section 129 of the CGST Act, 2017, on the ground that the delivery place mentioned in the e-way bill was different.
Specifically:
- The ‘ship-to’ address was Samastipur, Bihar, correctly mentioned.
- However, the PIN code of Patna was mistakenly entered instead of the PIN code of Samastipur.
- There was no mismatch in quantity, description, or documents.
Based on this clerical mistake, seizure order (Form MOV-06) and subsequent penalty proceedings were initiated.
Submissions by the Petitioner
The petitioner argued that:
- All mandatory documents (tax invoice, e-way bill, GR) accompanied the goods.
- The transaction was clearly a bill-to ship-to transaction, duly reflected in the invoice and e-way bill.
- The error in PIN code was purely inadvertent and without any intention to evade tax.
- Such minor mistakes are protected under Section 126 of the CGST Act, 2017, which bars penalty for minor breaches or procedural lapses.
- Reliance was placed on CBIC Circular dated 14.09.2018, which specifically states that proceedings under Section 129 should not be initiated for minor PIN code errors if the address is correct and e-way bill validity is unaffected.
- The petitioner relied upon the earlier judgment of the Allahabad High Court in M/s Ashok Kumar Maganbhai Patel vs. State of U.P.
Legal Provisions & Circular Relied Upon
Section 126, CGST Act, 2017
Provides that no penalty shall be imposed for minor breaches or easily rectifiable procedural lapses committed without fraudulent intent.
CBIC Circular No. 64/38/2018-GST dated 14.09.2018
Clause 5(b) clearly states:
Proceedings under Section 129 may not be initiated where there is an error in the PIN code, but the address of the consignor and consignee is correct, provided such error does not affect the validity of the e-way bill.
Court’s Observations
The Court noted that:
- The goods were accompanied by all valid documents.
- There was no dispute regarding quantity, quality, or tax liability.
- The mistake was limited to a wrong PIN code, while the address was otherwise correct.
- The case was squarely covered by the CBIC circular and earlier High Court judgment.
The Court reiterated that circulars issued by CBIC are binding on departmental authorities, and ignoring them renders the proceedings invalid.
Reliance on Precedent
The Court relied on its earlier decision in M/s Ashok Kumar Maganbhai Patel vs. State of U.P., where it was held that:
- Wrong mention of PIN code alone does not justify seizure.
- Section 129 proceedings are unsustainable when there is no intent to evade tax and documents are otherwise in order.
Final Decision of the Court
- The seizure and penalty orders dated 22.06.2023 and 30.07.2024 were quashed.
- The writ petition was allowed.
- Any amount deposited by the petitioner was directed to be refunded in accordance with law.
Key Takeaways for GST Taxpayers
- Minor clerical errors, such as an incorrect PIN code, do not justify seizure of goods.
- When documents are valid and intent to evade tax is absent, Section 129 proceedings are unsustainable.
- CBIC circulars are binding on GST officers and must be followed.
- Section 126 of the CGST Act offers protection against penalties for procedural lapses.
Conclusion
This judgment once again reinforces that GST enforcement should focus on substance over form. Penal action for trivial and technical mistakes defeats the intent of the law and causes unnecessary hardship to genuine taxpayers.
This ruling is a strong precedent for businesses facing GST detention or seizure due to minor e-way bill errors.