Court directs release of detained conveyance under Central Goods and Services Tax Act

The court ruled in favor of the petitioner, directing the release of the detained conveyance and its contents. The judgment emphasized the significance of complying with procedural requirements set forth in circulars related to the inspection and detention of goods under the Central Goods and Services Tax Act. The court found that the detention order issued under section 129 of the CGST Act was unsustainable due to the absence of discrepancies, non-compliance with procedural steps, and the failure to submit physical verification reports.

---

---

Issues involved:
1. Interpretation of Circular No.41/15/2018-GST and Circular No.64/38/2018-GST regarding the procedure for inspection and detention of goods under the Central Goods and Services Tax Act, 2017.
2. Compliance with the procedural requirements outlined in the circulars for physical verification and inspection of goods and conveyance.
3. Validity of the detention order issued under section 129 of the CGST Act without following the prescribed procedure.

Analysis:

Issue 1: Interpretation of Circulars
The petitioner relied on Circular No.41/15/2018-GST, emphasizing the requirement for the proper officer to conclude inspection proceedings within three days of issuing Form GST MOV-02, and to issue a release order if no discrepancies are found. The petitioner argued that no discrepancies were identified, necessitating the release of the conveyance. Reference was also made to Circular No.64/38/2018-GST, stating that if goods are accompanied by the necessary documents, proceedings under section 129 of the CGST Act should not be initiated. The absence of discrepancies in the invoice and e-way bill was highlighted to support the contention that detention was unwarranted.

Issue 2: Compliance with Procedural Requirements
The petitioner contended that the proper officer failed to follow the prescribed procedure outlined in the circulars. While the person in charge of the conveyance produced the required documents, no reports of physical verification were served or uploaded on the common portal as mandated. The petitioner argued that the officer directly issued an order of detention without adhering to the procedural steps, indicating non-compliance with the circular's provisions.

Issue 3: Validity of Detention Order
The Assistant Government Pleader acknowledged the absence of reports post-verification, indicating non-compliance with legal provisions and circular instructions. The court observed that since no discrepancies were found after detaining the vehicle and no physical verification report was submitted, the detention order under section 129 of the CGST Act lacked sustainability. Consequently, the court directed the release of the conveyance and its contents, considering the procedural lapses and absence of grounds for detention.

In conclusion, the judgment underscores the importance of adhering to procedural requirements outlined in circulars governing the inspection and detention of goods under the CGST Act. Non-compliance with these procedures can render detention orders unsustainable, as evidenced in this case where the absence of discrepancies and procedural lapses led to the release of the detained conveyance.

---