Case Title: M/s U.S Metal Products v. State of U.P & Others
Court: High Court of Judicature at Allahabad
Petition Number: WRIT TAX No. 1272 of 2022
Category of Dispute: Detention of Goods in Transit / Penalty under Section 129
Date of Judgement: 08 April 2025
Relevant Sections: Section 129 of CGST Act, Circular No. 64/38/2018-GST dated 14.09.2018
Presiding Judge: Hon’ble Justice Piyush Agrawal
Facts of the Case
[Para 3]
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M/s U.S Metal Products, a GST-registered firm in Uttarakhand, shipped goods to Rajasthan via Uttar Pradesh based on Tax Invoice No. 3063 dated 06.12.2021 and an e-way bill.
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During transit, the consignment was intercepted in U.P.
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It was found that the e-way bill mistakenly mentioned the invoice number as “3096” instead of “3063”.
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No other discrepancies relating to goods or documents were noted.
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The authorities issued a penalty order under Section 129 of CGST Act, later upheld in appeal.
Question(s) in Consideration
[Para 2, 6-8]
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Whether minor clerical errors (such as a digit error in the invoice number) in an e-way bill justify penalty proceedings under Section 129 of the CGST Act?
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Whether the Circular No. 64/38/2018-GST protects against such penal actions?
Observations of the Court
[Paras 6–9]
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The only discrepancy noted was a one-digit error in the invoice number mentioned in the e-way bill.
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Clause 5(d) of CBIC Circular No. 64/38/2018-GST clearly exempts such minor errors from triggering penalty proceedings.
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Circulars issued by CBIC are binding on GST authorities, as confirmed in CCE v. Ratan Melting & Wire Industries and Commissioner of Central Tax v. Gurukripa Resins Pvt. Ltd.
Judgement of the Court
[Paras 10–12]
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Held that the penalty proceedings under Section 129 initiated solely on account of a one-digit error in the invoice number are legally unsustainable.
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Quashed both the penalty order dated 19.12.2021 and appellate order dated 16.04.2022.
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Directed refund of any amount deposited by the petitioner in accordance with law.
Between Fine Lines:
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Clerical error of one digit in an e-way bill cannot trigger Section 129 proceedings.
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Circulars issued by CBIC are binding on field formations.
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Detention without material discrepancy violates taxpayer rights.
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Appellate authorities must consider binding circulars.
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This case strengthens the protection against frivolous penalties for minor document errors.
Summary of Referred Cases
| Name of Case | Citation | Summary | Verdict |
|---|---|---|---|
| CCE v. Ratan Melting & Wire Industries | 2008 (13) SCC 1 | Held that CBIC circulars are binding on departmental authorities unless contrary to the statute | Circulars are binding |
| Commissioner of Central Tax v. Gurukripa Resins Pvt. Ltd | AIR Online 2011 SC 596 | Followed Ratan Melting judgment; reaffirmed binding nature of circulars | Circulars must be followed by officers |
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