2018 (12) TMI 139 - HC - GST

Detention of goods - mismatch between the delivery challan and the e-way bill - Held that - The Department's demand on the petitioner to comply with Section 129(1)(a) cannot be faulted. At any rate, the Department's insisting on both the penalty and tax covering all the set-top boxes cannot be sustained. To be specific, the petitioner has already shown in the delivery challan 200 set-top boxes and mentioned its value as well. So for the remaining boxes, that is 600, the cost was not reflected. - Subject to further adjudication of the issue before the State Tax Officer, the petitioner could provide a bank guarantee and personal bond under Section 129(1)(a) for the amount to be confined to the 600 set-top boxes. Petition disposed off.

Summary

Issues:
Detention of goods for mismatch between e-way bill and delivery challan, applicability of Section 129 of GST Act, demand for compliance with Section 129(1)(a), liability for tax payment, interim release of goods.

Analysis:
The petitioner, a cable TV and Internet services provider, faced detention of goods by the Assistant State Tax Officer due to a discrepancy between the e-way bill and delivery challan. The e-way bill indicated a value of ?10,04,888/-, while the delivery challan showed ?3,20,000/-. The petitioner argued that the e-way bill accurately reflected the goods' value, attributing the discrepancy to a computer error in the delivery challan where the second lot of 600 boxes was mistakenly valued at zero. The petitioner contended that since the e-way bill and delivery challan both indicated the quantity of goods, any presumption of suppression was unwarranted.

The petitioner's counsel further argued that the transfer of stock between the petitioner's business points for internal use exempted them from tax liability, thus making Section 129 inapplicable. However, the Government Pleader maintained that the petitioner's defense should be presented before the State Tax Officer and that compliance with Section 129(1)(a) of the GST Act was necessary for interim release of the goods.

The judgment held that the Department's demand for compliance with Section 129(1)(a) was justified, but the insistence on penalty and tax for all set-top boxes was unsustainable. Notably, since the delivery challan already accounted for 200 set-top boxes, the petitioner was required to provide a bank guarantee and personal bond under Section 129(1)(a) only for the remaining 600 boxes. The court disposed of the writ petition, allowing for further adjudication of the issue before the State Tax Officer regarding the remaining set-top boxes' tax liability.