Penalty For Goods Detention Over PIN Code Error Unjustified | HC

Case Details: Ashok Kumar Maganbhai Patel vs. State of UP - [2025] 181 taxmann.com 89 (Allahabad)

Judiciary and Counsel Details

• Piyush Agrawal, J.
• Atul Gupta for the Petitioner.
• R.S. Pandey, ACSC for the Respondent.

Facts of the Case

The petitioner challenged the seizure of goods and imposition of penalty arising from detention during transit, where the consignment was moving from Gujarat to West Bengal in a bill-to-ship-to transaction. The record showed that the goods were accompanied by a tax invoice, e-way bill, and railway receipt, and that the only discrepancy was a one-digit error in the ship-to PIN code on the tax invoice while the full address was otherwise correct. The petitioner contended that clause 5(b) of Circular No. 64/38/2018-GST, dated 14-09-2018 clarified that proceedings under section 129 of the CGST Act may not be initiated where the PIN code is incorrect but the consignor or consignee address is correct, and submitted that the statutory appeal was dismissed without considering the binding nature of circulars issued under section 168 of the CGST Act. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the detention of goods and imposition of penalty under section 129 was unjustified since the only discrepancy was a one-digit PIN code error and all other prescribed documents were in order. The Court noted that clause 5(b) of Circular No. 64/38/2018-GST, dated 14-09-2018 clearly stated that such an error does not warrant initiation of proceedings under section 129 when the address of the consignor or consignee is otherwise correct, and emphasised that circulars issued under section 168 are binding on field formations. The Court observed that the record disclosed no intent to evade tax and no other irregularity in the documentation, making the seizure and penalty contrary to statute and the governing circular. The High Court accordingly set aside the impugned orders and allowed the writ petition.

List of Cases Reviewed

• CCE v. Usha Martin Industries 1997 taxmann.com 505/94 ELT 460 (SC)(para 13) followed

List of Cases Referred to

• CCE v. Usha Martin Industries 1997 taxmann.com 505/94 ELT 460 (SC) (para 6).