E-way bill detention fails where vehicle sale is complete at delivery and the car qualifies as a used personal effect.

Detention of a motor vehicle for absence of an e-way bill was held unjustified where the buyer had taken delivery in Puducherry, obtained temporary registration and insurance in his own name, and the sale was already complete before the vehicle was moved to Kerala. Applying the GST provisions on inter-State supply and the e-way bill rules, the Court treated the later movement as transport after completion of sale, not movement occasioned by the supply. It also accepted that the car, once purchased and used, could fall within the exemption for used personal and household effects under Rule 138(14). The detention notice and order were therefore found unsustainable.

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Issues: (i) Whether detention of the vehicle under Section 129 of the Kerala State Goods and Services Tax Act, 2017 was justified for want of an e-way bill. (ii) Whether the transaction was an inter-State supply requiring movement-linked compliance, or a completed purchase in Puducherry so that the transported car was a used personal effect outside the mischief of detention.

Issue (i): Whether detention of the vehicle under Section 129 of the Kerala State Goods and Services Tax Act, 2017 was justified for want of an e-way bill.

Analysis: Section 129 is a detention and release mechanism operating where goods are found in transit in contravention of the statutory requirements. Rule 138 of the Kerala Goods and Services Tax Rules, 2017 requires an e-way bill for movement of goods, but the exemption in sub-rule (14) applies where the goods answer the description of used personal and household effects. The vehicle was accompanied by a tax invoice showing payment of IGST on the purchase and on the transport service, and the factual foundation for invoking detention disappeared once the Court found that the movement was not a taxable supply in Kerala.

Conclusion: Detention under Section 129 was not justified and the impugned notice and order were unsustainable.

Issue (ii): Whether the transaction was an inter-State supply requiring movement-linked compliance, or a completed purchase in Puducherry so that the transported car was a used personal effect outside the mischief of detention.

Analysis: Under Sections 7, 8 and 10(1)(a) of the Integrated Goods and Services Tax Act, 2017, the nature of supply depends on where the movement of goods terminates for delivery to the recipient. The Court held that the purchaser took delivery in Puducherry, obtained temporary registration and insurance in his own name, and thereby the transfer of property in goods and the supply were completed there. The subsequent transport to Kerala was held to be movement after completion of sale, not movement occasioned by the supply. The Court further held that a car, once purchased, registered and used, could be treated as a used personal effect, and the exemption under Rule 138(14) was attracted. Consequently, the detention was found illegal and without jurisdiction.

Conclusion: The transaction was treated as a completed purchase in Puducherry and the car was treated as a used personal effect; the appellants succeeded.

Final Conclusion: The vehicle detention was quashed, the writ judgment was set aside, and the appeal was allowed because the movement did not attract GST detention provisions.

Ratio Decidendi: Where a purchaser takes delivery of a motor vehicle, obtains temporary registration and insurance in his own name, and the movement thereafter is independent of the supply, the sale is complete at the place of delivery and detention for absence of an e-way bill is not warranted, especially where the vehicle qualifies as a used personal effect.

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