2017 (10) TMI 831 - HC - GST

Detention of goods - non compliance with the requirement of carrying the prescribed documents under the IGST Act - Held that - although the power to prescribe the documents that are to accompany the transportation of goods in the course of interstate trade is conferred on the Central Government, the Central Government has, till date, not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement - the detention in Ext.P5, for the sole reason that the transportation was not accompanied by the prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained - appeal allowed - decided in favor of appellant.

Summary

Issues: Validity of detention of goods for non-compliance with prescribed documents under IGST Act

The judgment delivered by Justice A. K. Jayasankaran Nambiar of the Kerala High Court pertains to the detention of goods by the State Government for alleged non-compliance with the requirement of carrying prescribed documents under the IGST Act. The petitioner's goods and vehicle were released following an interim order. The court considered the power of the State Government to detain goods under the IGST Act, CGST Act, and SGST Act. The learned Government Pleader argued that the Central Government had not notified the documents required for interstate transportation of goods, rendering the detention invalid. The court analyzed the provisions of Section 4 and Section 20 of the IGST Act, Section 6 of the CGST Act, and Rule 138 of the CGST Rules. It concluded that without prescribed documents being notified by the Central Government, the State Government lacked the authority to detain goods solely for non-compliance with such documents. Therefore, the court allowed the writ petition, making the interim order absolute and ruling the detention in Ext.P5 as legally unsustainable.

In this case, the primary issue revolved around the legality of detaining goods due to non-compliance with prescribed documents under the IGST Act. The judgment emphasized the importance of the Central Government notifying the required documents for interstate transportation of goods. The court highlighted that without such notification, neither the State Legislature nor the State Government could enforce laws/rules governing interstate movements of goods. The analysis focused on the provisions of the IGST Act, CGST Act, and CGST Rules, particularly Section 4, Section 20 of the IGST Act, Section 6 of the CGST Act, and Rule 138 of the CGST Rules amended by notification No.27/2017 - Central Tax. The court's decision to allow the writ petition and declare the detention invalid underscored the necessity for clear guidelines from the Central Government regarding prescribed documents for interstate trade, ensuring legal compliance and preventing arbitrary detentions based on unnotified requirements.