2020 (10) TMI 627 - HC - GST

Detention of consignment of goods - mis-classification of the goods - case of petitioner is that the alleged mis-classification of the goods cannot be a reason for detaining the consignment under Section 129 of the GST Act - HELD THAT - There are force in the contention of the learned counsel for the petitioner that the allegation of mis-classification of goods cannot warrant a detention of the goods under Section 129 of the GST Act. If the respondents feel that there has been a mis-classification of the goods, then it is for them to prepare a report based on the physical verification done by them, get the petitioner to sign on the same after recording his objections, if any, to the findings recorded therein, and thereafter forward a copy of the said report to the Assessing Officer of the petitioner, who can consider the said report and objections at the time of finalising the assessment in relation to the petitioner. The detention of the goods in transit cannot be justified for the said reasons - the respondents are directed to forthwith release the goods and the vehicle to the petitioner, after getting the petitioner's signature/ objections recorded on the report prepared by the respondents pursuant to the physical verification of the goods in question - petition allowed.

Summary

Issues: Detention of goods under Section 129 of the GST Act based on alleged mis-classification

Analysis:
The petitioner challenged the Ext.P7 notice of detention served on him under Section 129 of the Goods and Service Tax Act due to the alleged mis-classification of goods being transported. The petitioner argued that mis-classification should not be a reason for detaining goods under Section 129 of the GST Act.

The Court heard arguments from both parties and considered the facts and submissions. It was observed that the detention of goods based solely on the allegation of mis-classification is unjustified under Section 129 of the GST Act. The Court emphasized that if there are concerns regarding mis-classification, the proper procedure would be for the authorities to conduct a physical verification, prepare a report, allow the petitioner to record objections, and forward the report to the Assessing Officer for consideration during assessment.

Consequently, the Court quashed the Ext.P7 notice and directed the immediate release of the goods and the vehicle to the petitioner. The release was subject to the petitioner's signature or objections recorded on the report prepared by the authorities after physical verification. The Government Pleader was instructed to inform the respondents about the order for prompt action. The petitioner was directed to provide a copy of the writ petition and judgment to the respondents for further necessary steps.