Inter-State goods detention cannot rest on absence of a State e-way bill where the IGST framework governs and no operative notification applied.

In inter-State movement of goods under the IGST regime, detention and penalty could not be sustained merely because the consignment was not accompanied by a Uttar Pradesh e-way bill, particularly where invoice and other documents were available and no fraudulent intent to evade tax was shown. The applicable statutory framework placed inspection and related procedures within the Central GST structure, and the State e-way bill requirement was not enforceable for the inter-State consignment on the relevant date because no operative Central e-way bill system had been notified for that movement. The impugned assessment and detention orders were set aside and the deposited tax and penalty were directed to be refunded.

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Issues: (i) Whether, in an inter-State movement of goods, detention and penalty could be sustained on the ground that the goods were not accompanied by a Uttar Pradesh e-way bill; (ii) whether the statutory scheme then in force required an e-way bill under the State regime for such inter-State transportation.

Issue (i): Whether, in an inter-State movement of goods, detention and penalty could be sustained on the ground that the goods were not accompanied by a Uttar Pradesh e-way bill.

Analysis: The transportation was from one State to another and therefore fell within the Integrated Goods and Services Tax regime. For matters of inspection, search, seizure and arrest, the Integrated Goods and Services Tax Act applies the Central Goods and Services Tax framework. The detention notice proceeded only on the absence of a Uttar Pradesh State e-way bill, although the consignment was accompanied by invoice and other documents, and the record did not show any fraudulent movement or intent to evade tax. The insistence on a State e-way bill for inter-State transport was legally unsustainable.

Conclusion: The detention and penalty could not be sustained on the ground of absence of a Uttar Pradesh e-way bill.

Issue (ii): Whether the statutory scheme then in force required an e-way bill under the State regime for such inter-State transportation.

Analysis: The relevant framework under the Central Goods and Services Tax Rules contemplated that, till the e-way bill system was fully operational and notified, the prescribed documents would be governed by the Central notification mechanism. On the date of interception, no operative Central e-way bill system had come into force for such movement, and the State notification could not govern inter-State supply. The State provisions invoked for detention were therefore inapplicable to the transaction.

Conclusion: No State e-way bill requirement was enforceable for the inter-State consignment on the relevant date.

Final Conclusion: The impugned assessment and detention orders were set aside and the deposited tax and penalty were directed to be refunded.

Ratio Decidendi: For inter-State movement of goods, State e-way bill requirements cannot be applied where the governing statutory framework places the matter within the Integrated Goods and Services Tax regime and no valid Central notification making the e-way bill system operative for the relevant date is in force.

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