2019 (3) TMI 596 - HC - GST

Detention - seizure - penalty - applicability of 129 of the Central Goods and Services Tax Act, 2017 - liability of transporter - Held that - Section 129(1) makes it adequately clear that any person who is interested in the goods shall be liable under Section 129(1)(b). Particularly, a reading of Section 129(6) would indicate that where a person transporting any goods or the owner of the goods, fails to pay the amount of tax and penalty as provided in sub-Section (1) within 14 days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of Section 130. This would undoubtedly indicate action not only against the goods, but also against the transporter. The non-obstante clause in Section 129 indicate that neither Section 126, nor the general provision of penalty under Section 125, or Section 122 would apply in cases where Section 129 is attracted. The learned Single Judge had rightly dismissed the Writ Petition refusing to find any infirmity in Exts.P5 to P7 notices - petitions dismissed.

Summary

Issues:
1. Detention, seizure, and penalty under Section 129 of the CGST Act for a transporter with no tax liability.

Analysis:
The case involved the question of whether a transporter with no tax liability could face detention, seizure, and penalty under Section 129 of the Central Goods and Services Tax Act, 2017. The petitioner, a transporting firm, had a vehicle intercepted while transporting goods without complete documentation. The goods had no tax liability, yet the vehicle was detained, and a substantial penalty was imposed. The petitioner argued that the penalty was unjustified as there was no tax evasion, and the breach was minor and easily rectifiable. The petitioner also cited relevant sections of the CGST Act to support their argument that the penalty imposed was excessive. However, the respondent contended that Section 129 is a self-contained provision applicable to any person transporting goods, including transporters, and overrides other penalty provisions. The court noted that Section 129 makes it clear that any person interested in the goods, including a transporter, shall be liable for penalties. Additionally, the court highlighted that failure to pay tax and penalty within the specified period could lead to further proceedings against both the goods and the transporter. The court also referred to a previous judgment to support the application of Section 129 in cases of non-compliance with tax regulations.

In conclusion, the court dismissed the appeal, upholding the imposition of penalties on the transporter despite the absence of tax liability. The court emphasized the applicability of Section 129 as a comprehensive provision for penalties in cases of non-compliance, including against transporters. The judgment reaffirmed that the transporter's liability extends to penalties under Section 129, even in the absence of tax evasion, emphasizing the importance of compliance with documentation and procedural requirements.