GST Update

Desk of CA. Praveen Sharma – 900 Series (CAPS)

Allahabad High Court in the case of RC Sales and Services

The petitioner, a GST-registered proprietorship firm, challenged seizure and penalty orders passed under Section 129 of the CGST Act.

The goods were transported under a valid “bill to – ship to” model and were accompanied by a proper tax invoice, e-way bill and goods receipt. There was no mismatch in quantity or description of goods.

The only discrepancy noticed by the department was a clerical error in the e-way bill, where the PIN code of Patna was mentioned instead of Samastipur, though the full address was otherwise correct.

The petitioner contended that the mistake was purely procedural and unintentional, falling within the scope of Section 126 of the CGST Act, which restricts penalties for minor and technical errors.

The petitioner also relied on the CBIC Circular dated 14.09.2018, which clarifies that proceedings under Section 129 should not be initiated for minor errors such as incorrect PIN code when the address is correct and the validity of the e-way bill is not affected.

The Court observed that there was no intention to evade tax and no other discrepancy was found during physical verification of the goods.

Holding that the seizure and penalty were unjustified, the High Court quashed the impugned orders and directed refund of any amount deposited by the petitioner.

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