Mere nondisclosure of place of destination in the documents cannot be a ground for seizure u/s 129 of GST Act.
In a recent judgment, Allahabad High Court has held that merely non-disclosure of place of destination in the accompanying documents cannot be a ground for seizure of goods under section 129 of GST Act 2017.
ABCAUS Case Law Citation:
4872 (2025) (11) abcaus.in HC
The petitioner had two places of business in Uttar Pradesh, principal place at Lucknow and other office at Noida. To complete a purchase order received from a purchaser, the Petitioner procured some parts from Noida unit, however, the invoices of the goods were only raised by the Lucknow unit and the delivery challan was issued to indicate that these goods were transferred from Noida to Lucknow unit.
The delivery challan was accompanying with e-way bill issued on the same date. In the delivery challan for the shipping address by mistake, name of the Purchaser company and its GSTN was mentioned, while billing address was mentioned as principal office at Lucknow. However, this mistake was corrected by issuing E-invoice generated and the same was uploaded on the e-invoice portal.
The said consignment enroute was intercepted by the Mobile Squad and the goods were detained on the ground that manual delivery challan being carried by the driver not having the signature of the official of the petitioner, which is in violation of the GST Rules. Further, the shipment address given in the document was not an additional place of business of the petitioner.
Since the goods were routinely required, the Petitioner made the payments and thereafter, the goods were got released. Thereafter, an order under section 129(3) of the GST Act was passed.
Before the Hon’ble High Court, the Petitioner contended that goods had merely been seized that the shipping address given in the document was not shown as an additional place of business of the petitioner. It was submitted that on the said ground, the goods cannot be seized.
In support of his submissions, petitioner placed reliance on the judgement of the High Court which had been affirmed by the Apex Court.
The Hon’ble High Court observed that Commissioner of GST, UP had issued a circular dated 17.01.2024 providing therein that the proceedings under section 129 of the GST Act cannot be initiated on the ground that the destination address is not declared as its additional place of business of the party to whom the goods are being sent. The said circular is binding upon the authorities.
The Hon’ble High Court observed that once the goods in question is duly accompanying by e-way bill, which clearly demonstrates the genuineness of the documents and during validity of the said e-way bill, which has not been cancelled, the Department is well aware of the movement of the said goods in question and therefore, no intention to evade payment of tax can be attributed to the petitioner
The Hon’ble High Court further observed that in the case in hand, once the valid document, i.e., e-way bill, was also accompanying the goods, which had not been disputed, the authorities ought not to have dragged the petitioner in an unnecessary litigation.
Accordingly, the impugned order passed under section 129(3) of GST Act was quashed.
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