Revenue Cannot Change Stand After Verification in GST Transit Case

Case Title: M/s Maa Kamakhya Trader v. Additional Commissioner Grade 2 and Another
Court: High Court of Judicature at Allahabad
Petition No.: Writ Tax No. 1386 of 2023
Date of Judgment: 28.04.2025 (Reserved on 22.04.2025)
Hon’ble Judge: Justice Piyush Agrawal
Category of Dispute: Detention of goods in transit / Validity of GST Proceedings
Relevant Sections: Section 129 & 130 of CGST Act, 2017 (Detention & Confiscation of Goods in Transit) and Rule 138 of CGST Rules (E-way bill provisions)
Neutral Citation: 2025:AHC:64555

Facts of the Case

1. The petitioner’s goods were in transit from Guwahati to Delhi and intercepted in Amroha, U.P. on 21.09.2023; all relevant documents (tax invoice, e-invoice, e-way bill, bilty) were produced, and driver’s statement recorded in MOV-01 confirming correctness .

2. A physical verification (MOV-04) was conducted, and no discrepancy in goods description vis-à-vis invoices was found .

3. Despite this, authorities later changed their stand and alleged mismatch in goods description, leading to issuance of demand and dismissal of appeal .

4. In the counter affidavit, authorities made no reference to MOV-04 where no difference was found .

Question(s) in Consideration

• Whether the State authorities can change their stand after recording no discrepancy in physical verification (MOV-04) of goods in transit?

• Whether such detention and consequential demand are sustainable under GST law?

Observations of the Court

1. Goods were accompanied by all valid documents and verified in MOV-04 without any discrepancy .

2. Revenue’s argument that incorrect description appeared due to auto-filling with HSN Code was rejected since data entry is manual, and officer entered it after verification .

3. Once MOV-04 recorded correctness, authorities cannot later adopt a contrary stand or supplement new grounds .

4. Court relied on Jitendra Kumar v. State of U.P. (Writ Tax No. 1425 of 2023), holding that Revenue cannot shift grounds and detention without valid cause is illegal .

Judgment of the Court

1. The impugned order dated 10.11.2023 was quashed as being unsustainable in law .

2. Writ petition allowed; any amount deposited during litigation to be refunded within three weeks .

Between Fine Lines (5-Line Simple Summary)

• Goods were properly documented and verified during GST transit check.

• MOV-04 physical verification confirmed no discrepancies.

• Authorities later changed their stand and raised a demand.

• Court held such volte-face is impermissible under GST law.

• Order quashed; refund directed within three weeks.

Summary of Referred Cases

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