Court Orders Release of Goods in Transit Despite Non-Registration Issue

The court held that the detention of the consignment in transit was not justified based on the non-registration of the consignor or mis-classification of goods. Despite the absence of a delivery challan, a valid e-way bill covered the transportation, and the liability of the petitioner for the release of the goods was determined under Section 129(1)(b) of the GST Act. The court directed the release of the goods and the vehicle upon the petitioner paying Rs. 25,000, as per the provisions of the GST Act.

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Issues: Detention of consignment in transit, non-registration of consignor, mis-classification of goods, detention under Section 129 of GST Act, liability of petitioner for release of goods.

Detention of consignment in transit:
The petitioner, a purchaser of fresh turmeric, challenged the detention of the consignment in transit at Muthanga in Wayanad. The consignment was transported under an invoice and e-way bill generated by the petitioner, showing the goods as attracting tax on a reverse charge basis and being exempted from tax under HSN code 910. The detention was due to non-registration of the person making the interstate supply and the validity of the purchase bill as a supporting document for interstate taxable supply.

Non-registration of consignor and mis-classification of goods:
The petitioner argued that the consignor agriculturist did not require registration under Sections 23 and 24 of the GST Act. Even if the goods were wrongly classified, detention under Section 129 was not justified. The absence of a delivery challan from the consignor did not warrant detention based solely on the petitioner's generated invoice. The government pleader stated that the goods did not match the description of exempted goods under HSN Code 910 and lacked a necessary delivery challan.

Detention under Section 129 of GST Act:
The court held that the non-registration of the consignor or mis-classification of goods could not be grounds for detention under Section 129. Despite the absence of a delivery challan, a valid e-way bill covered the transportation, describing the goods under HSN Code 910. The liability of the petitioner for the release of detained goods was determined under Section 129(1)(b), requiring payment of 5% of the goods' value or Rs. 25,000, whichever is lesser.

Liability of petitioner for release of goods:
The court directed the release of goods and the vehicle upon the petitioner paying Rs. 25,000, as per Section 129(1)(b) and Section 129(3) of the GST Act. The respondents were instructed to release the goods upon payment and complete proceedings under Section 129(3). The government pleader was tasked with communicating the judgment to the concerned respondent for immediate compliance upon payment by the petitioner.

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