Cured invoice discrepancy before detention order defeats penalty and seizure proceedings in transit

Where a transit discrepancy in the tax invoice and e-way bill was cured by production of corrected documents before the detention or seizure order was passed, continuation of penalty proceedings was not justified. The defect was not disputed, and the coercive order was issued only after the discrepancy had already been rectified. On that factual basis, the impugned detention and penalty orders could not be sustained.

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Issues: Whether penalty and detention proceedings were sustainable when the corrected tax invoice and e-way bill were produced before the detention and seizure order was passed.

Analysis: The goods were intercepted in transit on the basis of a discrepancy between the accompanying documents and the goods found in the vehicle. Before any detention or seizure order was passed, the petitioner produced a fresh tax invoice and e-way bill, thereby curing the discrepancy. That fact was not disputed by the authorities. In the circumstances, and following the binding view taken in earlier identical cases, the proceedings ought not to have been continued once the defect stood rectified before the coercive order was made.

Conclusion: The issue is answered in favour of the petitioner. The impugned orders could not be sustained on the facts found by the Court.

Ratio Decidendi: Where a documentation discrepancy in transit is cured by production of the correct invoice and e-way bill before the detention or seizure order is passed, continuation of penalty proceedings is not justified.

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