Detention of goods upheld despite E-invoice manipulation claims, petitioner directed to pursue GST Act Section 107 appeal

The Madras HC dismissed a writ petition challenging detention of goods and conveyance based on allegedly manipulated E-invoice. The court found no violation of natural justice principles as the petitioner was given opportunity to reply to show cause notice and their response was considered before passing the impugned order. The respondent properly relied on GST Circular No.17/22 mandating E-invoice submission from October 2022 for businesses with turnover exceeding Rs.10 crores. The court directed the petitioner to pursue statutory appeal under Section 107 of GST Act, 2017, and instructed the Appellate Authority to consider provisional release application under Section 129(1) upon deposit of penalty amount.

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Issues:
Challenge to order under Section 129 of GST Act, 2017 - Penalty imposition - Detention of goods and conveyance - Submission of reply to show cause notice - Rejection of reply based on E-invoice discrepancy - Writ petition seeking release of detained goods - Statutory appellate remedy under Section 107 of GST Act, 2017 - Consideration of provisional release on depositing penalty amount - Directions for filing statutory appeal and seeking provisional release.

Analysis:
The writ petition challenges an order passed under Section 129 of the Goods and Services Tax Act, 2017, imposing a penalty on the petitioner for discrepancies related to E-invoicing. The respondent detained the petitioner's vehicle and goods due to the absence of an E-invoice during transportation. The petitioner submitted a reply explaining the situation, citing technical issues in generating E-invoices for a scrap sale. However, the respondent rejected the reply, deeming the submitted E-invoice as manipulated.

The court noted that the petitioner had a statutory appellate remedy available under Section 107 of the GST Act, 2017 but opted for a writ petition due to the detention's potential heavy loss. The petitioner expressed willingness to deposit the penalty amount for provisional release of goods and conveyance. However, the court found that principles of natural justice were not violated as the respondent provided reasons for rejecting the reply and considered the Circular mandating E-invoicing.

The court directed the petitioner to file a statutory appeal and apply for provisional release before the Appellate Authority. It instructed the Appellate Authority to decide on the appeal within two weeks and consider the application for provisional release promptly. Additionally, the court directed the respondent to entertain any application for provisional release under Section 129(6) of the GST Act, 2017, on payment of a specified penalty amount within a week of filing.

In conclusion, the writ petition was disposed of with directions for statutory appeal filing, seeking provisional release, and consideration of the penalty amount for release of detained goods and conveyance. No costs were awarded, and the connected miscellaneous petition was closed.

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