Wrong PIN Code In E-Way Bill Alone Cannot Trigger Seizure Or Penalty Under GST Act: Allahabad High Court Reaffirms

The Allahabad High Court has once again made it clear that GST authorities cannot detain goods or impose penalties merely because of a wrong PIN Code in an e-way bill, if the addresses of the consignor and consignee are otherwise correct.

A single-judge bench of Justice Piyush Agrawal held that proceedings under Section 129 of the GST Act are are not justified for clerical mistakes.

Relying on a binding circular issued by the Central Board of Indirect Taxes and Customs and his own earlier ruling, the court said such action by tax officers is legally unsustainable.

The court reiterated, “if the address of consignor or consignee is correct and PIN code has wrongly been mentioned, the proceedings under Section 129 may not be initiated.”

Section 129 of the GST Act allows tax officers to detain, seize and release goods and vehicles during transit if there is a violation of GST law or an intent to evade tax. Goods are released only after payment of tax and penalty or on furnishing security. The court, however, stressed that this power cannot be used for minor or technical errors without any intent to evade tax.

The case involved a proprietorship firm dealing in threshing and crushing machinery. The firm had dispatched goods under a valid tax invoice and e-way bill to a buyer in Bihar. During transit in June 2023, the consignment was intercepted. Physical verification showed no mismatch in the quantity or quality of goods. Still, the goods were seized on the ground that they were being transported to a different place, and penalty proceedings were initiated under Section 129.

Approaching the High Court, the petitioner said all documents were in order. The delivery address and seller's address were correctly mentioned in both the invoice and the e-way bill. The only mistake was that the PIN Code of Patna was entered instead of the PIN Code for Samastipur in the “ship to” column. The firm argued that this was a simple clerical error, made without any mala fide intention, and that there was no attempt to evade tax.

The court noted that the department had not pointed out any discrepancy other than the wrong PIN Code. It relied on Clause 5(b) of the September 14, 2018 circular, which clearly states that proceedings under Section 129 should not be initiated where there is an error in the PIN Code but the addresses of the consignor and consignee are correct, provided the mistake does not extend the validity of the e-way bill.

Quoting its earlier judgment, the court observed, “Once the goods in question were accompanied with all proper document and no discrepancy has been pointed out except wrong mentioning of PIN code and further there was no intent to evade the payment of tax, the proceedings are not justified in the eyes of law”

Holding that the proceedings were initiated only because of the wrong mentioning of the PIN Code and were not justified in the eyes of the law, the High Court quashed the orders passed by the GST authorities.