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of <h1>Surgical Gloves Detention Overturned: Section 129 Violation Invalidates Seizure of Goods During Quality Appraisal Transport</h1> <h3>Age Industries (P.) Ltd. Versus Assistant State tax Officer</h3> Age Industries (P.) Ltd. Versus Assistant State tax Officer - 2018 (10) G.S.T.L. 16 (Ker.) , [2018] 1 GSTL 57 (Ker) Issues involved:Detention of goods under Section 129 of the SGST Act based on reasons related to transportation of goods on delivery chalans and suspicion of tax evasion.Analysis:Issue 1: Detention based on lack of declaration under Rule 138(2) of the State SGST RulesThe petitioner's consignment of surgical gloves was detained by the respondent under Section 129 of the SGST Act for not uploading a declaration in accordance with Rule 138(2) of the State SGST Rules. However, the court held that the power of detention can only be exercised for goods liable to be confiscated under Section 130 of the SGST Act. It was emphasized that there is no taxable supply when goods are transported on delivery chalans, as long as the authenticity of the chalan is not in question. Therefore, the detention based on the lack of declaration was deemed unsustainable.Issue 2: Detention based on intended supply to an unregistered firmThe second reason for detention was that the goods were intended to be supplied to an unregistered firm, raising suspicion of tax evasion. The petitioner clarified that the consignment was meant for quality appraisal on a job work basis for three parties, which is a permissible transaction. The court highlighted that under the CGST and SGST Act, goods for such purposes are to be transported on delivery chalans, and the registration status of the recipient is irrelevant. The court noted that the respondent cannot detain goods based on reasons not mentioned in the notice (Ext.P2). As the notice contained only two reasons, the court did not entertain arguments related to the preparation of the delivery chalan under the State SGST Rules. Consequently, the detention on the grounds of intended supply to an unregistered firm was deemed illegal.Conclusion:The writ petition was allowed, and the impugned detention of the consignment was declared illegal. The respondent was directed to release the goods to the petitioner promptly. However, the judgment clarified that the respondent could still initiate penalty proceedings under the SGST Act for non-compliance with the State SGST Rules if provided by law.
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