Detention order quashed for disproportionate penalty under Tamil Nadu GST Act.

The court found the detention order and penalty imposed under the Tamil Nadu Goods and Services Tax Act, 2017 to be disproportionate. Despite a transportation error, there was no tax evasion, and all documents were in order. The court emphasized the need for reasonable exercise of statutory powers, quashing the penalties and ordering the immediate release of the goods and vehicle. The judgment underscores the importance of considering circumstances and intent in alleged violations, particularly when there is no evidence of deliberate non-compliance with statutory requirements.

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Issues:
Detention of goods under the Tamil Nadu Goods and Services Tax Act, 2017 due to incorrect transportation route and lack of cooperation from the driver.

Analysis:
The writ petitioner, an authorized dealer for Bajaj Auto Limited, registered under the Goods and Service Tax Act, placed an order for 40 two-wheelers. The vehicle carrying the goods was intercepted by the respondent roving squad en route to Sivakasi instead of stopping at Virudhunagar, leading to detention and a penalty of Rs. 18,96,000. The respondent alleged that the driver moved towards Sivakasi on the instructions of a representative of the writ petitioner. However, the driver, who did not know English or Tamil, claimed to have taken a wrong turn due to incorrect instructions. Despite the mistake, there was no tax evasion, and all necessary documents were in order.

The court emphasized that the detention order and penalty were disproportionate to the offense. The respondent should have directed the vehicle back to Virudhunagar instead of being harsh. The circular from the Government of India urged officials to overlook minor lapses and impose a nominal fine of Rs. 500, which was not considered in this case. The nature of the goods, two-wheelers requiring proper registration, indicated that the writ petitioner could not evade statutory obligations. The court accepted the writ petitioner's offer to pay a fine of Rs. 5,000, quashing the impugned orders and ordering the immediate release of the goods and vehicle.

In conclusion, the court found the respondent's actions unreasonable and disproportionate, emphasizing the need for statutory powers to be exercised reasonably. The judgment highlights the importance of considering the circumstances and intent behind alleged violations, especially in cases where there is no evidence of tax evasion or deliberate non-compliance with statutory requirements.

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