Wrong PIN Code in E-Way Bill Not a Ground to Detain Goods Under GST: Allahabad HC Quashes Detention and Penalty [Read Order]

The Allahabad High Court has quashed GST detention and penalty proceedings initiated on account of an incorrect PIN code mentioned in the e-way bill, holding that such a clerical error does not justify action under Section 129 of the Central Goods and Services Tax Act, 2017.

The writ petition was filed by M/s RC Sales and Services, a proprietorship firm engaged in the business of threshing and crushing machinery. In the petition, seizure and penalty orders dated June 22, 2023 and July 30, 2024 were challenged. The dispute arose after goods transported in relation with a ‘bill to ship to’ transaction were intercepted during transit.

The petitioner submitted that the goods were dispatched under a ‘bill to ship to’ arrangement, and the invoice clearly reflected the correct billing and delivery details. It was contended that although the delivery address was correctly mentioned as Samastipur, Bihar, the PIN code of Patna was inadvertently entered in the e-way bill under the “ship to” column. The petitioner argued that there was no discrepancy or an intent to evade tax.

Reliance was placed on Clause 5(b) of CBIC Circular No. 64/38/2018-GST dated September 14, 2018, which clarifies that proceedings under Section 129 should not be initiated where the address of the consignor and consignee is correct and only the PIN code is wrongly mentioned, given the condition that such error does not extend the validity period of the e-way bill. The petitioner also relied on an earlier decision of the High Court in Ashok Kumar Maganbhai Patel v. State of Uttar Pradesh.

The State authorities defended the impugned orders but were unable to dispute the applicability of the circular.

Justice Piyush Agrawal, in his order, observed that the consignment was accompanied by all requisite documents and the only discrepancy was regarding incorrect PIN code. He held that a minor clerical error could not form the basis for initiating proceedings under Section 129 ofthe CGST Act.

Adhering to the binding nature of departmental circulars and earlier judicial precedents, the High Court concluded that the seizure and penalty proceedings were contrary to law. Accordingly, the impugned orders were quashed and the writ petition was allowed.

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