GSTIN Typographical Error During Goods Transit — Madras High Court Examines Penalty Under Section 129(1)(a) of TNGST Act, 2017
Case Overview: B. Perumal Vs Deputy Commercial Tax Officer
The Madras High Court recently took up a writ petition in B. Perumal Vs Deputy Commercial Tax Officer, where the central question revolved around whether a penalty levied solely on account of a typographical error in the GSTIN during transit of goods could be sustained, and whether a writ court was the appropriate forum to provide relief in such circumstances.
Background and Facts of the Case
The assessee filed a writ petition before the Madras High Court seeking two primary reliefs:
- Quashing of the impugned order dated 03.02.2026 passed by the second respondent authority
- A direction to refund the penalty amount along with applicable interest
The demand against the assessee had been raised under Section 129(1)(a) of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act, 2017), which pertains to detention, seizure, and release of goods and conveyances during transit.
The assessee's position before the Court was straightforward — there was no substantive discrepancy in the goods being transported. The only irregularity detected by the authorities was a typographical mistake in the GSTIN mentioned in the accompanying documents. The assessee contended that such a clerical error, with no intent to evade tax and no actual mismatch in goods, should not attract a penalty of this nature.
However, a critical fact altered the trajectory of the proceedings: by the time the matter came up before the High Court, the assessee had already paid the full penalty amount as demanded by the authorities.
Relevant Statutory Provisions
Section 129(1)(a) of the TNGST Act, 2017
Section 129(1)(a) of the TNGST Act, 2017 empowers the authorities to detain or seize goods and conveyances found in transit where discrepancies are noticed, and thereafter issue orders for release upon payment of applicable tax and penalty. The provision operates notwithstanding anything contained elsewhere in the Act, giving it an overriding character in transit-related enforcement actions.
Section 129(5) of the TNGST Act, 2017 — The Deeming Provision
The Government Pleader appearing on behalf of the respondents drew the Court's attention to Section 129(5) of the TNGST Act, 2017, which reads as under:
"129(5) On payment of the amount referred to in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded."
This provision carries significant legal weight. Once the demanded amount is paid by the assessee, the law itself treats all proceedings arising from the notice as having come to a close. The deeming fiction under Section 129(5) leaves no room for further adjudication in respect of that notice once payment has been made.