2020 (1) TMI 1091 - HC - GST

Detention of goods alongwith vehicle - e-way bill had expired/lapsed - section 129 of CGST Act - HELD THAT - Section 129 is a complete code for the purpose of addressing all violations committed in transit leading to detention, seizure and release of goods and brings within its sweep all such contraventions, irrespective of the gravity of the violation itself. This observation is made in response to the submission of the petitioner that the offence in this case is only the lapsing of e-way bill, and that too for bonafide reasons, and this offence may not be viewed very harshly. Chapter 16 of the Central CST Rules 2017, setting out the E-way Rules in Rule 138. The second proviso under Rule 138(10) permits a transporter to extend the validity of the expired e-way after updating the details in the relevant Form and this benefit would be available in a case such as the present - In fine, the amount to be remitted would, in terms of Section 129(1)(b), be ₹ 86,700/- each towards CGST and SGST. As for penalty, the petitioner enjoys the benefit of Circular no.10 of 2019 dated 31.05.2019 where at para 10, the Commissioner reduces the penalty payable in certain circumstances to ₹ 5000/-. Mr.Shafiq agrees that the case on hand would be covered by this beneficial provision. Thus upon remittance of the taxes of a sum of ₹ 86,700/- each towards Central and State Taxes and penalty of ₹ 5000/-, the consignment shall be released forthwith. Petition disposed off.

Summary

Issues:
1. Validity of detention of goods due to expired e-way bill.
2. Interpretation of Section 129 of the CGST Act regarding the release of detained goods.
3. Consideration of penalty reduction under Circular no.10 of 2019.

Analysis:
1. The petitioner, a transporter, was engaged to transport goods with an expired e-way bill due to a breakdown. The lorry was detained for non-possession of a valid e-way bill, despite a notice being issued under Section 129(3) of the Goods and Service Tax Act, 2017. The petitioner's argument regarding the absence of a valid Goods Detention Notice was dismissed after evidence of the notice served on the driver was presented.

2. Section 129 of the CGST Act governs the detention, seizure, and release of goods in transit. The section outlines the conditions for release, including payment of applicable tax and penalty. The judgment clarifies that Section 129(1)(b) applies when the owner of the goods does not come forward to pay the tax and penalty, necessitating the transporter to pay the tax and penalty equal to 50% of the value of the goods reduced by the tax amount paid.

3. The judgment discusses the interpretation of the phrase "owner of the goods coming forward/not coming forward to pay tax and penalty." It emphasizes that the actual remittance of payment by the owner or transporter is required, rather than a mere offer or undertaking to pay. Additionally, the judgment highlights the availability of penalty reduction under Circular no.10 of 2019, where the penalty payable can be reduced to a specified amount in certain circumstances.

In conclusion, the court ordered the remittance of specific amounts towards Central and State Taxes, along with a reduced penalty, for the immediate release of the detained consignment. The judgment affirms the comprehensive nature of Section 129 in addressing violations during the transit of goods, emphasizing the importance of adhering to the statutory provisions for the release of detained goods.