Court upholds compliance with GST Act, rejects penalty on all set-top boxes. Bank guarantee required for uncovered boxes.

The court upheld the Department's demand for compliance with Section 129(1)(a) of the GST Act but found the insistence on penalty and tax for all set-top boxes unsustainable. The petitioner was required to provide a bank guarantee and personal bond only for the 600 boxes not covered in the delivery challan. The writ petition was disposed of, allowing further adjudication before the State Tax Officer on the tax liability of the remaining set-top boxes.

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Issues:
Detention of goods for mismatch between e-way bill and delivery challan, applicability of Section 129 of GST Act, demand for compliance with Section 129(1)(a), liability for tax payment, interim release of goods.

Analysis:
The petitioner, a cable TV and Internet services provider, faced detention of goods by the Assistant State Tax Officer due to a discrepancy between the e-way bill and delivery challan. The e-way bill indicated a value of Rs. 10,04,888/-, while the delivery challan showed Rs. 3,20,000/-. The petitioner argued that the e-way bill accurately reflected the goods' value, attributing the discrepancy to a computer error in the delivery challan where the second lot of 600 boxes was mistakenly valued at zero. The petitioner contended that since the e-way bill and delivery challan both indicated the quantity of goods, any presumption of suppression was unwarranted.

The petitioner's counsel further argued that the transfer of stock between the petitioner's business points for internal use exempted them from tax liability, thus making Section 129 inapplicable. However, the Government Pleader maintained that the petitioner's defense should be presented before the State Tax Officer and that compliance with Section 129(1)(a) of the GST Act was necessary for interim release of the goods.

The judgment held that the Department's demand for compliance with Section 129(1)(a) was justified, but the insistence on penalty and tax for all set-top boxes was unsustainable. Notably, since the delivery challan already accounted for 200 set-top boxes, the petitioner was required to provide a bank guarantee and personal bond under Section 129(1)(a) only for the remaining 600 boxes. The court disposed of the writ petition, allowing for further adjudication of the issue before the State Tax Officer regarding the remaining set-top boxes' tax liability.

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