Abhay Prakash Katariar Vs State of UP And 2 Other (Allahabad High Court)
The Allahabad High Court in Abhay Prakash Katariar vs State of UP & Others (2025) set aside the seizure and penalty imposed under Section 129(3) of the GST Act on a hydraulic excavator that was being transported for repair, holding that such movement does not constitute a taxable supply.
The petitioner’s excavator, after completion of job work, was being returned for further repair when it was intercepted by the GST Mobile Squad, Gautam Buddha Nagar, on July 14, 2022. Though an e-way bill and delivery challan were generated, the vehicle was seized on the ground that the documents appeared to be an “afterthought.” The Assistant Commissioner demanded ₹3.42 lakh for release of the goods and imposed a tax and penalty of the same amount. The petitioner’s appeal before the Additional Commissioner was dismissed.
Before the High Court, the petitioner argued that the excavator was not a good being sold but equipment sent for repair, and thus the provisions of Section 129 concerning movement of taxable goods were not applicable. Reliance was placed on CBIC Circulars dated 7 July 2017 and 22 November 2017, which clarified that movement of machinery for repair or maintenance does not amount to supply under GST and is therefore not taxable. The petitioner further cited Collector of Central Excise, Vadodara v. Dhiren Chemical Industries (2002) 143 ELT 19 (SC) and CCE v. Ratan Melting & Wire Industries (2008) 231 ELT 22 (SC),* where the Supreme Court held that government circulars are binding on tax authorities.
