2023 (12) TMI 514 - HC - GST

Release of detained goods alongwith vehicle - owner of the goods - proceeding initiated under Section 129 of the CGST Act - whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act? - HELD THAT - In the present case, goods were found with proper tax invoice and E-way bill belonging to the petitioner. Hence, Circular dated December 31, 2018 would apply and the petitioner would be deemed to be the owner of the goods. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act. The order passed by the authorities dated October 19, 2023 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act within a period of three weeks from today - Petition allowed.

Summary

Issues Involved:
The judgment involves the detention of goods and vehicle under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the subsequent release of the goods.

Detention of Goods and Vehicle:
The main issue in the writ petition is whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act. The petitioner, the owner of the goods, argued for release under Section 129(1)(a) while the authorities calculated penalties under Section 129(1)(b) of the CGST Act.

The petitioner received an order for supply of goods, which were loaded on a vehicle and intercepted in the State of U.P. The goods were found to be as per the invoice and E-way bill. Despite the petitioner being the owner, the authorities detained the goods and imposed penalties under Section 129(1)(b) of the CGST Act.

Legal Interpretation and Precedents:
The petitioner cited Circular No.76/50/2018-GST to support their claim that the goods should be released under Section 129(1)(a) if the invoice or specified document accompanies the consignment. Additionally, the petitioner relied on previous judgments where it was held that when the owner produces tax invoice and E-way bill, the goods belong to the owner and penalties should be calculated under Section 129(1)(a) of the CGST Act.

The Division Bench judgments highlighted the applicability of Circular dated December 31, 2018, stating that when the owner produces necessary documents, the goods are deemed to belong to the owner, warranting release under Section 129(1)(a) of the CGST Act.

Judgment and Direction:
Considering the evidence and legal principles, the court quashed the authorities' order and directed the release of goods under Section 129(1)(a) of the CGST Act. The authorities were instructed to carry out the release within three weeks. As the petitioner did not press for other prayers, they were advised to pursue them in the appropriate forum.

Therefore, the writ petition was allowed based on the above directions, emphasizing the application of Section 129(1)(a) for the release of goods in this case.