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Issues: (i) Whether goods transported on the basis of a delivery challan, but without the declaration required under Rule 138, could be detained under Section 129 of the GST enactments even when the underlying movement was claimed to be non-taxable; (ii) whether the absence or subsequent upload of the declaration under Rule 138 could defeat liability to detention, penalty and adjudication under Section 129.
Issue (i): Whether goods transported on the basis of a delivery challan, but without the declaration required under Rule 138, could be detained under Section 129 of the GST enactments even when the underlying movement was claimed to be non-taxable.
Analysis: The statutory scheme requires that where goods are moved on a delivery challan in lieu of invoice, the movement must also be supported by the declaration prescribed under Rule 138. A delivery challan issued by the consignor is not a substitute for the departmental intimation contemplated by the rules. The absence of the prescribed declaration gives rise to a reasonable presumption that the movement was not properly disclosed to the Department and that diversion or evasion of tax could not be ruled out. On that basis, Section 129 operates notwithstanding the assessee's assertion that the goods were otherwise non-taxable.
Conclusion: The goods were liable to detention under Section 129, and the learned Single Judge's view that mere procedural infraction could not justify detention was not sustained.
Issue (ii): Whether the absence or subsequent upload of the declaration under Rule 138 could defeat liability to detention, penalty and adjudication under Section 129.
Analysis: The decisive factor is whether the declaration was uploaded before commencement of transport. If the declaration existed prior to movement but was not physically available with the vehicle, the assessee could rebut the presumption and seek relief from penalty. But a declaration uploaded only after detention does not cure the breach or negate liability. The adjudication under Section 129(3) is therefore real and not illusory, because the assessee may still prove prior compliance, but failing that, the statutory tax and penalty consequences follow.
Conclusion: Subsequent upload after detention did not absolve liability, and the respondents were required to undergo adjudication under Section 129(3).
Final Conclusion: The detention was held to be within jurisdiction, the statutory breach was treated as actionable, and the appeals succeeded in setting aside the relief granted by the writ court.
Ratio Decidendi: Where transport of goods is supported by a delivery challan but the declaration required by the GST rules is not shown to have been uploaded before movement, Section 129 applies and the assessee must rebut the resulting presumption to avoid detention and penalty.
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