HC quashes seizure under GST, holding that valid e-way bill and genuine transport override clerical errors like unsigned challan or undeclared destination.
Meetu Kumari | Nov 22, 2025 |
Allahabad HC Quashes GST Seizure for Wrong Shipping Address & Unsigned Delivery Challan
M/s Prostar M Info Systems Ltd., a GST-registered company, received a purchase order from TCIL for the delivery of UPS systems, batteries, and related components to M/s ANA Business Ventures in Lucknow. The company operates two units in U.P., Noida and Lucknow. Some items required for the purchase order were sourced from its Noida unit, but invoicing was done only from its principal place of business at Lucknow.
The consignment was intercepted the same day at Etah, and the mobile squad detained the goods. A show cause notice under Section 129(3) followed, and although the goods were released upon payment, orders under Section 129(3) and on appeal went against the petitioner, leading to the present writ.
Main Issue: Whether goods accompanied by a valid e-way bill can be detained under Section 129 merely because the delivery challan lacked a signature and the destination address was not declared as an additional place of business.
HC’s Ruling: The Court held that the seizure was legally unsustainable. It noted that the State GST Commissioner’s Circular dated 17.01.2024, binding on departmental officers, explicitly clarifies that non-declaration of the destination address as an additional place of business cannot trigger Section 129 proceedings. The State’s counsel could not dispute the applicability of this circular. Since a valid e-way bill was accompanying the goods, the Department was already aware of their movement, and no element of tax evasion could be inferred.
Referring to Sleevco Traders and Satyam Shivam Paper Pvt. Ltd., the Court reiterated that when goods are supported by proper documents and the e-way bill is valid, the authorities must release the consignment rather than initiate unwarranted detention proceedings. The Court found that the petitioner was dragged into unnecessary litigation despite full documentary compliance, and it thus quashed both impugned orders.
The writ petition was allowed.
To Read Full Judgment, Download PDF Given Below
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