Facts of the case:

In this case, the petitioner was having two places of business in Uttar Pradesh—Noida and Lucknow—received a purchase order from Telecommunication Consultant India Ltd. (TCIL) for supply of batteries, UPS and supporting parts to the consignee ANA Business Ventures, Lucknow. To execute the order, certain goods were procured from the petitioner’s Noida unit, but invoices were raised from the Lucknow unit, and a delivery challan was issued to indicate stock transfer from Noida to Lucknow.

A valid e-way bill accompanying the delivery challan was generated, showing TCIL as the consignee. However, inadvertently, the petitioner also mentioned its own name and GSTIN in the “ship to” field of the delivery challan, which was subsequently corrected by issuing a proper invoice. An e-invoice was generated and uploaded on 19.12.2023.

On 19.12.2023 at 17:37 hours, the consignment was intercepted and the goods were detained on the ground that the delivery challan carried by the driver was unsigned, allegedly violating GST Rules and the shipping address was not declared as an additional place of business of the petitioner.

A show-cause notice under Section 129(3) was issued on 22.12.2023. Since the goods were urgently required, the petitioner made the necessary payment under protest to secure release. Subsequently, an order under Section 129(3) was passed, and the petitioner’s appeal was dismissed. The Petitioner challenged both orders, arguing that a valid e-way bill accompanied the goods, the minor defect in delivery challan could not justify seizure, non-declaration of the shipping address cannot trigger Section 129 proceedings, placing reliance on Sleevco Traders (affirmed by the Supreme Court).

Issue:

Whether goods accompanied by a valid e-way bill can be detained under Section 129 of the GST Act merely because the shipping address is not declared as an additional place of business and the delivery challan lacks a signature.

Held that:

The Allahabad High Court allowed the writ petition and held that Non-declaration of consignee’s address is not a ground for detention. The Court relied on Commissioner of State GST Circular dated 17.01.2024, clarifying that proceedings under Section 129 cannot be initiated solely on the ground that the destination address is not declared as an additional place of business. This Circular is binding on all State GST authorities.

Further, the goods were accompanied by a valid e-way bill that was never cancelled and clearly represented identity of goods, place of dispatch, destination details, and movement route. Hence, when statutory transport documents are valid, the Department is fully aware of the goods’ movement—thus, no presumption of tax evasion arises.

The Court referred to Sleevco Traders, affirmed by the Supreme Court, which held that if the e-way bill is genuine and valid, goods match the e-way bill description, and no tax discrepancy exists, then detention is impermissible, and the taxpayer must not be dragged into unnecessary litigation.

The Court held that the seizure lacked any evidence of evasion,  any statutory violation affecting tax liability, and any justification under Section 129.

Case Name: M/s Prostar M Info Systems Limited Versus State of UP and 3 others dated 17.11.2025

To read the complete judgement 2025 Taxo.online 2985