The Allahabad High Court has ruled that minor clerical errors such as a one or two-digit mismatch in the GST invoice or on the GST e-way bill cannot be the basis for initiating proceedings under Section 129 of the Central Goods and Services Tax ( CGST ) Act, 2017.
The petitioner, a manufacturing firm based in SIDCUL, Haridwar, Uttarakhand, is engaged in the production of components for the electrical appliances and automotive industries.
During the course of business, the petitioner dispatched goods to Syska LED Lights Pvt. Ltd. along with a valid tax invoice (No. 3063 dated 06.12.2021) and proper transportation documents. The goods, while in transit from Uttarakhand to Rajasthan, were intercepted in Uttar Pradesh. Although all documents were in order, the e-way bill mistakenly cited the invoice number as “3096” instead of “3063”.
Despite this minor error, the State Tax Officer imposed a penalty under Section 129(1)(a) of the CGST Act, 2017.
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The petitioner’s appeal against the penalty was also dismissed by the Additional Commissioner (Appeals), Muzaffarnagar. Aggrieved by both orders, the petitioner approached the High Court.
The petitioner relied on Circular No. 64/38/2018-GST dated 14.09.2018, specifically clause 5(d), which clarifies that if goods are accompanied by valid documents and an e-way bill, proceedings under Section 129 should not be initiated for minor errors, including those involving a one or two-digit discrepancy in the document number.
Also read: No Penalty leviable u/s 129 of GST Act on Search and Seizure at Godown: Allahabad HC
Justice Piyush Agwrwal observed that no discrepancies were found in the quantity, quality, or type of goods during verification, only a typographical mistake in the invoice number.
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The Court further observed that circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) are binding on field officers, stating the Supreme Court’s rulings in Commissioner of Central Excise v. Ratan Melting & Wire Industries And Commissioner of Central Tax v. Gurukripa Resins Pvt. Ltd.
The Court quashed the penalty orders dated 16.04.2022 and 19.12.2021 and held that the entire proceedings initiated against the petitioner were not sustainable in law. It also directed that any amount deposited by the petitioner in this regard must be refunded in accordance with the law.
Also read: GST: Kerala HC rules Detention for Undeclared Goods u/s 129 Valid, Orders Release on Penalty Payment [Read Order]
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