M/s Ashok Kumar vs. State of Uttar Pradesh & Others (Allahabad
High Court – Writ Tax No. 947 of 2025)
Introduction
This case is a
significant pronouncement by the Allahabad High Court on the misuse of Section
129 of the Goods and Services Tax Act, 2017. The Court examined whether goods
can be detained and penalty imposed merely because the PIN code of the
consignee was wrongly mentioned, even though all other details—including
the address—were correct.
The judgment reinforces the binding nature of CBIC Circular No. 64/38/2018-GST
and protects taxpayers from harsh action for minor technical errors.
1.
Name of Parties
·
Petitioner: M/s
Ashok Kumar
·
Respondents: State
of Uttar Pradesh & Others
2.
Case Number: Writ Tax No. 947 of 2025
3.
Court Name: High Court of Judicature at Allahabad
4.
Date of Judgment: 25 November 2025
Background
of the Case
The petitioner, M/s
Ashok Kumar, was transporting goods from Gujarat to West Bengal
under a bill-to-ship-to arrangement. The consignment was accompanied by
all essential documents:
- Tax Invoice
- E-Way Bill
- Railway Receipt (R.R.)
During transit through
Uttar Pradesh, the mobile squad intercepted the goods. Upon inspection, the
officer found only one discrepancy:
➡️ The PIN code of the
ship-to party was wrongly entered, although the full address was correct.
Despite this minor human
error, the goods were seized, and proceedings under Section 129(3)
were initiated. The authority imposed a penalty of ₹21,98,870, which the
petitioner paid under protest to secure release of urgently required goods.
The petitioner filed an
appeal, but the appellate authority upheld the penalty without considering
the binding CBIC Circular or the factual matrix. Hence, the present writ
petition was filed.
Petitioner’s
Submissions
The petitioner argued:
1. Only a Clerical Error
– No Intent to Evade Tax
The only alleged
discrepancy was a wrong digit in the PIN code.
All documents were valid, and the transaction was genuine.
Therefore, no intention of evasion could be attributed.
2. Circular Dated
14.09.2018 Protects the Taxpayer
The petitioner relied
heavily on CBIC Circular No. 64/38/2018-GST, specifically Clause 5(b)
which clarifies:
If the address of
consignor/consignee is correct and only the PIN code is wrong, proceedings
under Section 129 should not be initiated,
provided the mistake does not extend the validity of the e-way bill.
In this case, the
validity period was unaffected.
3. Circulars are Binding
on Tax Authorities
Relying on the Supreme
Court judgment in
Collector of Central Excise vs. Usha Martin Industries (1997) 7 SCC 47,
the petitioner submitted that circulars issued by higher authorities are
binding on all subordinate officers. Despite this, the authorities ignored
the circular and imposed a hefty penalty.
4. No Other Discrepancy
Found
The goods had:
- Correct address
- Correct documentation
- Valid tax invoice
- Proper e-way bill
Thus, seizure and penalty
were illegal.
Respondent’s
Stand
The learned Additional
Chief Standing Counsel (ACSC) defended the actions of the department and
supported the impugned orders. However, no substantial discrepancy,
apart from the PIN code error, could be shown.
Court’s
Findings
After hearing both sides
and reviewing the record, the Court made the following observations:
1. PIN Code Error Alone
Does Not Justify Seizure
The goods were loaded in
Gujarat and destined for West Bengal. It was a legitimate bill-to-ship-to
transaction.
The Court noted that the address was correct, and only the PIN code
digit was wrong.
2. Circular of 14.09.2018
is Binding
The Court quoted Clause
5(b) of the CBIC Circular, which specifically lists “error in PIN code
with correct address” as a situation where Section 129 proceedings
should not be initiated.
The Circular is clear,
unambiguous, and intended to prevent harassment over minor technical mistakes.
3. Supreme Court
Precedent Applies
By relying on Usha
Martin Industries, the Court reaffirmed that:
- CBIC circulars are binding
- Officers cannot ignore or override
them
Therefore, the very
initiation of proceedings was invalid.
4. No Other Irregularity
Was Found
The records showed:
- Goods were accompanied with all
proper documents
- No tax evasion
- No misuse of e-way bill validity
- No variation in quantity,
description, or destination
Thus, the seizure and
penalty were illegal.
Judgment
The High Court allowed
the petition and held that:
1. Seizure
of goods and imposition of penalty merely due to wrong PIN code is illegal.
2. The
impugned order dated 22.11.2024 and the demand dated 23.11.2024 are quashed.
3. Any
amount deposited by the petitioner shall be refunded in accordance with law.
Conclusion:
This
judgment reinforces a consistent judicial trend protecting GST taxpayers from
arbitrary detention of goods for minor clerical errors.
The Court has clearly held:
- Technical mistakes cannot result in
harsh penal consequences.
- Circulars intended to guide
departmental practice must be respected.
- Section 129 should be invoked only in
cases involving real suspicion of tax evasion.
The decision is a
significant relief for businesses engaged in inter-State movement of goods,
especially in bill-to-ship-to transactions where minor data-entry errors are
common.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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