Facts of the Case:
In this case, the petitioner was engaged in the business of manufacturing and supplying threshing machinery and related equipment. On 19.06.2023, the vehicle was intercepted by the GST authorities. Despite the goods being accompanied by all requisite documents, namely valid tax invoice, e-way bill, and Goods Receipts (GRs), the authorities conducted physical verification and passed a seizure order in Form GST MOV-06, alleging that the goods were being transported to a different place of delivery.
Subsequently, a show cause notice in Form DRC-01 dated 22.06.2023 was issued, and proceedings under Section 129(3) of the CGST Act, 2017 were initiated, culminating in adverse orders dated 22.06.2023 and 30.07.2024, which were challenged in the present writ petition.
The petitioner’s consistent case was that the transaction was a “bill to – ship to” transaction, clearly reflected in both the tax invoice and the e-way bill. While the ‘ship to’ address was correctly mentioned as Samastipur, Bihar, the PIN code of Patna was inadvertently entered instead of the correct PIN code of Samastipur. There was no dispute regarding the description, quantity, or value of goods, nor any allegation of tax evasion.
The petitioner contended that the mistake was purely clerical and inadvertent, covered by Section 126 of the CGST Act, and further protected by Clause 5(b) of CBIC Circular dated 14.09.2018, which discourages initiation of proceedings under Section 129 for minor errors such as incorrect PIN code, provided the address is otherwise correct and there is no impact on the validity of the e-way bill.
Issue:
Whether proceedings under Section 129 of the CGST Act, 2017 are justified solely on account of an incorrect PIN code in the e-way bill, when the consignor and consignee addresses are otherwise correctly mentioned and all statutory documents accompany the goods? Whether such a clerical error constitutes a “minor procedural lapse” protected under Section 126 of the CGST Act and CBIC Circular dated 14.09.2018, thereby barring seizure and penalty proceedings?
Held that:
The Court held that it was undisputed that the transaction was a “bill to – ship to” transaction. The goods were accompanied by all prescribed statutory documents, and there was no discrepancy in the description, quantity, or value of goods. The only lapse was the wrong mention of PIN code in the e-way bill, while the address of the consignee (Samastipur, Bihar) was correctly stated.
Relying on Clause 5(b) of CBIC Circular No. 64/38/2018-GST dated 14.09.2018, the Court reiterated that proceedings under Section 129 should not be initiated in cases where the address of consignor/consignee is correct, and the error in PIN code does not extend the validity of the e-way bill.
The Court further relied upon its earlier decision in M/s Ashok Kumar Maganbhai Patel v. State of U.P., where it was categorically held that wrong mentioning of PIN code alone does not justify detention or seizure.
It was also emphasized that CBIC circulars are binding on departmental authorities, and initiation of proceedings contrary to such circulars is illegal and unsustainable.
Accordingly, the seizure and penalty proceedings were held to be arbitrary, contrary to law, and against the intent of the GST framework. The Court directed that any amount deposited by the petitioner pursuant to the impugned orders be refunded in accordance with law.
Case Name: M/s Rc Sales And Services Versus State Of Uttar Pradesh And 2 Others dated 18.12.2025
To read the complete judgement 2025 Taxo.online 3350
