Ashok Kumar Maganbhai Patel Vs State of UP and 3 others (Allahabad High Court)
In the case of Ashok Kumar Maganbhai Patel vs State of UP and others, the Allahabad High Court addressed the legality of GST-related seizure and penalty under Section 129 of the CGST Act, 2017. The petitioner’s goods were in transit from Gujarat to West Bengal under a “bill to ship to” transaction, accompanied by a valid tax invoice, e-way bill, and railway receipt. The goods were seized solely because the PIN code of the consignee was incorrectly mentioned on the invoice, although the rest of the address was correct. A penalty of ₹21,98,870 was imposed, and an appeal by the petitioner was dismissed. The petitioner argued that the seizure and penalty were unjustified, citing CBIC Circular No. 64/38/2018 dated 14.09.2018, which states that proceedings under Section 129 should not be initiated if the consignor’s and consignee’s addresses are correct and only the PIN code contains an error, provided it does not affect the validity of the e-way bill. The petitioner also relied on the Supreme Court decision in Collector of Central Excise, Patna vs Usha Martin Industries (1997) that circulars issued by higher authorities are binding on subordinate authorities. The High Court observed that the goods were accompanied by all proper documents, no other discrepancy existed, and there was no intent to evade tax. Therefore, the seizure and penalty were held to be legally unsustainable. The Court allowed the writ petition, set aside the impugned orders, and directed that any deposited amounts be refunded in accordance with law.
