Penalty quashed for minor PIN code error in E-way bill; CBIC Circular binding

Issue

Whether the detention of goods and imposition of penalty under Section 129 is justified when there is a minor one-digit error in the PIN code on the E-way bill/invoice, while the address is correct and all other documents are in order.

Facts

Transaction: The petitioner transported goods from Gujarat to West Bengal in a “bill-to-ship-to” transaction.
Documentation: The consignment was accompanied by a valid Tax Invoice, E-way bill, and Railway Receipt.
The Error: There was a one-digit error in the PIN code of the “Ship-to” party on the tax invoice. However, the complete address mentioned was correct.
Department’s Action: Despite the presence of valid documents, the goods were intercepted and seized solely on the ground of the PIN code error. A penalty was imposed under Section 129, and the subsequent statutory appeal was dismissed.
Defense: The petitioner argued that this was a technical error without any intention to evade tax, citing CBIC Circulars that bar penalty for such minor discrepancies.

Decision

Circular Protection: The High Court relied on CBIC Circular No. 64/38/2018-GST (dated 14.09.2018), specifically Clause 5(b). This clause clarifies that proceedings under Section 129 may not be initiated for an error in the PIN code if the address of the consignor/consignee is correct (provided the error does not increase the validity period of the E-way bill).
Binding Nature: The Court reiterated that circulars issued by the Board are binding on field formations. The authorities cannot ignore benevolent circulars to impose penalties on technical grounds.
Absence of Evasion Intent: The record showed no other discrepancy in quantity or description, and no intent to evade tax was established.
Ruling: The initiation of seizure and penalty was held to be unjustified and contrary to the statutory instructions. The impugned orders were set aside, and the writ petition was allowed in favour of the assessee.

Key Takeaways

Technical Errors are Excuseable: Minor clerical mistakes (like a PIN code digit or a spelling error in the name) do not warrant detention or penalty under Section 129 if the primary address and GSTIN are correct.

Circular 64/38/2018 is Crucial: This specific circular is the primary defense for transporters and taxpayers against harassment for minor documentation lapses. It lists specific scenarios (PIN code, HSN digits, Vehicle number digits) where only a nominal penalty (Rs. 1000 under Section 125) or no penalty should be levied instead of full detention.

HIGH COURT OF ALLAHABAD

Ashok Kumar Maganbhai Patel

State of UP

Piyush Agrawal, J.

Writ Tax No. 947 of 2025

NOVEMBER 25, 2025

Atul Gupta for the Petitioner. R.S. Pandey, ACSC for the Respondent.

ORDER

1. Heard Mr. Atul Gupta learned counsel for the petitioner and Mr. R.S. Pandey, learned ACSC for the respondent(s).

2. By means of present petition, the petitioner is assailing the order dated 22.11.2024 along with demand reference no. 23.11.2024 passed by Additional Commissioner.

3. Learned counsel for the petitioner submits that goods in question were in transit from Gujrat to West Bengal, which were duly accompanied with tax invoice, e-way bill and R.R. The goods in question were bill to ship to transaction and the same were seized on the premise that in the tax invoice PIN code of ship to party was wrongly mentioned and no other discrepancy was found in any other documents. He submits that reply was submitted but being not satisfied with the same, the proceedings under Section 129 (3) were initiated and the order was passed by which penalty to the tune of Rs. 2198870/- was imposed. He submits that as the goods were urgently required, therefore, on deposit of penalty, the goods were released, thereafter, the petitioner filed appeal, which was also dismissed without considering the material on record.

4. Learned counsel for the petitioner further submits that merely on the ground of technical error, one digit of PIN code has wrongly been mentioned, therefore, the present proceedings ought not to have been initiated against the petitioner.

5. In support of his submission, he relied upon the Circular issued by Ministry of Finance, Deptt. Of Revenue, Govt. of India on 14.9.2018, wherein it is clearly mentioned in Clause 5 (b) that if there is an error in PIN code but the address of consignor and consignee is correct, then the proceeding ought not to have been initiated under Section 129 of the Act. He submits that in the case in hand, circular is binding upon the authorities, but the goods were not only seized but penalty was also imposed. He submits that there was no intention to avoid the payment of tax.

6. He further relied upon the decision of Apex Court in the case of CCE v. Usha Martin Industries (SC)/(1997) 7 SCC 47 and submits that the circulars are binding upon the authorities.

7. He further submits that merely because of human error in mentioning wrong PIN code in the address of ship to party, no evasion of tax can be attributed.

8. Per contra, learned ACSC supports the impugned order.

9. After hearing learned counsel for the parties, the Court has perused the records.

10. It is not in dispute that the goods in question were moving from Gujrat to West Bengal and the transaction in question was bill to ship to but on the tax invoice PIN code in the address of ship to party was wrongly mentioned though the address was correct. But on the said premise, the goods in question were seized, whereas in view of the circular dated 14.9.2018, the goods were not liable to be seized.

11. Clause 5 (b) of the circular issued by Govt. of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs, New Delhi dated 14.9.2018 (C.B.I.&.C. Circular No. 64/38/2018 -GST) is quoted hereunder:-

5. Further, in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under Section 129 of the CGST Act may not be initiated, inter alia, in the following situations:-

(a)

…..

(b)

Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill.

12. On perusal of the aforesaid circular, it shows that 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.

13. Hon’ble the Apex Court in the case of Usha Martin Industries (supra) has held that circulars issued by the higher authorities are binding upon the subordinate authorities. Hence, the initiation of present proceedings, itself, is bad and against the intent of statute.

14. Further, the record shows that no other discrepancy, has been pointed out by any of the respondent authorities. The goods in question was accompanied with all proper and prescribed documents. 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.

15. In the results, the writ petition succeeds and is allowed. The impugned orders are set aside.

16. Any amount deposited by the petitioner shall be refunded to him in accordance with law.