Vehicle and goods released after expired E-way bill detention due to procedural violations under Section 129 CGST Act

The HC allowed a petition seeking release of a detained vehicle and goods where the E-way bill had expired. The court found that proceedings under Section 129 of CGST Act were initiated and concluded on the same date without proper opportunity for defense. Despite respondent's claim that proceedings were expedited at taxpayer's request, no evidence supported this contention. The court held that both the adjudication order and appellate order suffered from procedural infirmities and lack of proper opportunity for the transporter to defend. The impugned orders were set aside and petition was allowed.

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Issues: Alleged violation of Section 129 of CGST Act, 2017

Detailed Analysis:

1. Alleged Violation of Section 129:
The case involved an alleged violation of Section 129 of the Central Goods and Services Tax Act, 2017, related to the detention, seizure, and release of goods and conveyances in transit. The vehicle in question was intercepted due to an expired E-Way bill, leading to subsequent proceedings, including the issuance of notices and adjudication orders. The petitioner contended that the proceedings were held ex parte without providing a proper opportunity for a reply or hearing. The petitioner argued that there was no intention to evade tax, citing a Supreme Court decision supporting this claim.

2. Respondent's Counter Affidavit:
The respondents filed a counter affidavit stating that the vehicle was intercepted as the E-Way bill had expired, and no extension was sought. They highlighted that a notice with a seven-day reply period was served, but the authorized person did not appear. The vehicle was released upon payment of tax and interest, as the taxpayer did not provide any submission. The respondent argued that the intention to evade tax was not necessary under Section 129 for imposing liability.

3. Legal Analysis of Section 129:
The court analyzed Section 129 of the CGST Act, which outlines the detention, seizure, and release of goods and conveyances. The section mandates that no goods or conveyance shall be detained or seized without serving an order to the person transporting the goods. It also specifies timelines for issuing notices, passing orders for penalties, and the consequences of non-payment. The court noted that the proceedings in this case were initiated and concluded on the same date, raising procedural concerns.

4. Court Decision:
After considering the submissions and provisions of Section 129, the court found procedural infirmities in the adjudication order and the appellate order. The court set aside the impugned orders but allowed the respondents to take a fresh decision after providing due opportunity to the petitioner as per the Act. The writ petition was allowed in favor of the petitioner to the extent indicated in the judgment.

In conclusion, the judgment addressed the alleged violation of Section 129 of the CGST Act, emphasizing procedural fairness and the importance of providing opportunities for defense in such cases. The court's decision highlighted the need for proper adherence to legal procedures and the opportunity for parties to present their case effectively.

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