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TMI BlogLet us put a full stop on erroneous invocation of Section 129 of CGST Act, 2017.X X X X Extracts X X X X X X X X Extracts X X X X ..... Let us put a full stop on erroneous invocation of Section 129 of CGST Act, 2017. X X X X Extracts X X X X X X X X Extracts X X X X ..... ionals which could otherwise focus on much complicated provisions of CGST Law is simply wasted on a minor issue due to lack of clarity at both ends, this article intends to create awareness on this topic. 2. Section 129 reads as notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods shall be liable for detention or seizure. While the section is on detention or seizure of goods, vehicle as well as documents, where there is a contravention of provisions of this Act, it is happening in many cases without e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablishing that there is contravention. 3. It is really unfortunate situation that CBIC had to issue three Circulars on this subject which are discussed in the following paragraphs. It is suggested that all the three circulars may be downloaded from CBIC website itself and always carried by the respective drivers to enable them to furnish the same to the officer who intercepts the vehicle. It helps in two ways. The officer, even when aware of the circulars is forced to take decision based on the circular and the supplier or receiver who is actually transporting the goods may strengthen the case by furnishing such circulars to the concerned officer. 4. The first Circular was issued on 13/04/2018 against reference number 41/15/2018 GST. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is circular sets out detailed procedures to be followed while invoking detention/seizure. This circular was amended vide circular number 49/23/2018-GST on 21/06/2018. The purpose of the amendment was mainly to avoid detention of entire consignment, where there is a defect only in respect of part of the said consignment. However, even after these two circulars, desired results were not forthcoming and the CBIC was required to issue one more circular vide reference number 64/38/2018-GST dated 14/09/2018. This is the most important circular and the same is analysed below. 5. The extent to which the CBIC was forced to come down and explain not to detain or seize goods on minor procedural irregularities as explained in para 5 of the above circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar is really a matter of concern. This is a good step in order to avoid such detention in undesirable cases. However, the danger is that the field formations may allow only to the extent of examples quoted, without appreciating the fact that this circular is a guideline to avoid unnecessary litigation. Para Narration HIDDEN MESSAGE to field formation a Spelling mistake in the name of consignor or consignee but GSTIN wherever applicable is correct Interpret narrowly and detain in all other cases b Error in pin code but addresses are correct except when such pin code increases the validity period of e way bill Detain even if there is a comma, full stop or spelling mistake elsewhere c Error in address of consignee but locatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and other details of consignee are correct Interpret narrowly d Error in one or two digits of the document Maximum two digits e Error in 4 or 6 digits level of HSN where first two digits are correct and rate is same Interpret narrowly f Error in one or two digits/characters of vehicle number Maximum two only permitted To avoid the possibility of interpretation based on hidden message as above, field formation may be instructed to be liberal wherever there was no intention to evade the payment of GST as it would not be possible while giving examples so exhaustively by covering all possible errors. The officers have liberty to levy penalty as per law and as explained in the Circular. 6. It was held by Allahabad High Court that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen substantial compliance of the provision is disclosed and when the physical inspection tallies with goods declared in the e way bill, and no intent of tax evasion is made out, proceedings under section 129 is vitiated. M/s. Monotech Systems Limited Vs State of U P and two others, - 2025 (1) TMI 207 - ALLAHABAD HIGH COURT 7. In a very peculiar case, which was decided by the Allahabad High Court on 17/02/2025, it is observed that all other documents were produced except e invoice. Even physical invoice was shown as e invoice could not be generated due to technical glitch. The officers went to the extent of detention, even without establishing that there was an intention to evade payment of GST. Refer the case Agarwal steels Versus Additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Commissioner Grade 2 and another. 8. On 18/02/2025, Allahabad High Court passed order similar to one in para 07 in the case of S.P. Fabricreators versus State of U P and 3 others - 2025 (2) TMI 882 - ALLAHABAD HIGH COURT. 9. In yet another case which was decided on 20/02/2025 in the case of Vishnu Singh Versus State of U P and two others, it was observed that there was no intention to evade tax and all the requirements were correctly fulfilled except the mention of e invoice number. The error was only in the e way bill and instead of correct e invoice number, the system (SAP) generated number was mentioned in the e way bill which was also reflected in the e invoice itself. However, authorities levied tax as well as penalty though no i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention to evade tax was established and the error was a human error only. 10. Tax payers who transport goods are required to take certain precautions to ensure that goods are not detained or seized during the course of transportation. Senior officials of the GST department may also instruct the officer who inspects the documents to pass orders based on the facts and circumstances of the cases and to resort detention or seizure, only when the intention to evade payment of GST is established. Reply By Sadanand Bulbule as = Dear Sir Invocation of Section 129/130 has become a main source of revenue rather than a curative measure. In the process, the conveyances are being detained for months/weeks together, mercilessly ignoring the urgenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the consignment. Apart from needless penalty, the parties have to bear huge demurrage charges. In a way it is a double edged sword to kill an ant.
The real tragedy is, only the genuine transactions are more prone to such penalty for ignorable errors.There is no respect at all for any judicial rulings of the Apex Court as well. Very pathetic hurdle in the way of swift transportation of goods and ease of doing business!
Let this article open the eyes of the authorities.
Dated: 26-2-2025 X X X X Extracts X X X X X X X X Extracts X X X X
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