The Allahabad High Court ruled that a minor clerical error in the PIN code on an e-way bill does not justify the detention and penalty under GST laws. This decision came from the case of M/s Rc Sales and Services versus the State of Uttar Pradesh and others, where the petitioner, a GST-registered firm, faced penalties due to an incorrect PIN code on the e-way bill, despite all other details being correct.
The goods were seized under Section 129 during transit because of the PIN code error, leading to penalty orders which the petitioner challenged. The issue was whether such a minor error could sustain GST detention and penalties when the rest of the details were accurate. The court decided that proceedings under Section 129 could not be initiated for such an error, relying on a CBIC Circular from September 2018 that protects against penalties for minor clerical mistakes if they do not affect the validity of the e-way bill.
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The court noted that the transaction was traceable, with no discrepancies in the goods or intent to evade taxes. Therefore, it quashed the seizure and penalty orders, directing that any amounts deposited by the petitioner be refunded according to the law. This ruling underscores the importance of distinguishing between minor clerical errors and substantial discrepancies in GST compliance.
Order Date: 18 December 2025
Parties: M/s Rc Sales and Services v. State of Uttar Pradesh & Others
Facts:
- The petitioner, a GST-registered proprietorship firm, transported goods pursuant to a “bill to–ship to” transaction supported by a valid tax invoice, e-way bill, and GRs.
- During transit, the goods were intercepted and seized under Section 129 on the ground that the PIN code mentioned in the “ship to” address in the e-way bill was incorrect, though the address itself was correct.
- Proceedings under Section 129(3) culminated in penalty orders dated 22.06.2023 and 30.07.2024, which were challenged before the High Court.
Issue:
- Whether GST detention and penalty proceedings under Section 129 can be sustained solely due to an incorrect PIN code in the e-way bill when all other particulars are correct?
Order:
- The High Court held that a mere clerical error in mentioning the PIN code, where the consignor and consignee addresses are otherwise correctly stated, does not warrant initiation of proceedings under Section 129.
- The Court relied upon CBIC Circular dated 14.09.2018, which expressly protects such minor errors from penal consequences, provided there is no impact on e-way bill validity.
- It observed that the transaction was fully traceable and there was no discrepancy in the quantity, quality, or movement of goods, nor any intent to evade tax.
- Accordingly, the impugned seizure and penalty orders were quashed, and the writ petition was allowed with a direction to refund any amount deposited by the petitioner in accordance with law.
