Detention of goods in transit needs real contravention; mere destination mismatch with invoice and e-way bill is insufficient.

An appellate remedy under section 107 was held unavailable where no reasoned adjudicatory order had been passed or shown to have been served after the taxpayer's explanation, so the writ could not be rejected on alternate-remedy grounds. Detention of goods under section 129 was found unjustified because the consignment carried an invoice and e-way bill, and the later delivery documents supported the explanation for the changed destination; a mere mismatch of destination, without evidence of a substantive contravention or intent to evade tax, was treated as insufficient for punitive recovery. The collection of tax and penalty was set aside and refund with interest was granted.

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Issues: (i) Whether the writ petition was barred by the availability of an appellate remedy under section 107; (ii) whether detention of the goods and collection of tax and penalty under section 129 were justified where the consignment was accompanied by invoice and e-way bill but was found at a destination different from the one mentioned in the original transport documents.

Issue (i): Whether the writ petition was barred by the availability of an appellate remedy under section 107.

Analysis: Section 107 contemplates an appeal against a decision or order passed by an adjudicatory authority. No reasoned order was passed or communicated after the petitioner's explanation to the show-cause notice, and the alleged subsequent order was neither produced nor shown to have been served. In the absence of an appealable decision, the petitioner could not be driven to the appellate remedy.

Conclusion: The objection based on alternate remedy was rejected.

Issue (ii): Whether detention of the goods and collection of tax and penalty under section 129 were justified where the consignment was accompanied by invoice and e-way bill but was found at a destination different from the one mentioned in the original transport documents.

Analysis: Detention under section 129 is justified only where there is contravention of the Act or the rules. The governing circular distinguishes serious violations from minor or procedural defects and states that where an invoice and e-way bill accompany the consignment, proceedings under section 129 may not be initiated for mere technical errors. The Court treated the relevant enquiry as the nature of the contravention and whether there was intent to evade tax. The vehicle carried the supplier's invoice and e-way bill, and the later intra-transit sale and delivery documents supported the petitioner's explanation. A mere mismatch of destination, without more, was held insufficient to establish contravention or tax evasion. The collection was therefore treated as arbitrary and contrary to the statutory scheme and the circular.

Conclusion: The detention and collection were held to be unjustified and the petitioner was entitled to refund with interest.

Final Conclusion: The writ petition succeeded, the impugned collection was set aside, and consequential refund relief was granted.

Ratio Decidendi: For detention of goods in transit under section 129, the authority must assess the nature of the contravention and whether there is a demonstrable intent to evade tax; a mere procedural discrepancy, especially where the consignment is accompanied by invoice and e-way bill, does not by itself justify punitive recovery.

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