Gail (India) Ltd Vs State of U.P. And 2 Others (Allahabad High Court)
The petitioner challenged an order dated 15.10.2020 concerning the detention and seizure of machinery being transferred from its Raigarh Unit to its Pata Unit. The goods were intercepted due to errors in the e-way bill, including an incorrect vehicle number, combined invoice values, and an invoice without a corresponding e-way bill. The petitioner argued that the transfer was only a stock transfer between units with separate GSTINs, involving old machinery with no element of sale or tax evasion, and that the discrepancies were technical mistakes. The petitioner relied on a CBIC Circular dated 14.09.2018 and earlier High Court rulings stating that technical errors without intent to evade tax should not attract penalty under Section 129 of the CGST Act. The State contended that the discrepancies justified detention and seizure.
The Court held that the goods were undisputedly stock transfer and no tax evasion was involved. It found that the mistakes in the e-way bill were technical and not substantive. Referring to its earlier judgments, the Court ruled that penalty under Section 129(3) was unsustainable. The impugned order was quashed, the writ petition allowed, and the petitioner was entitled to a refund of any amount deposited.
