Goods detained for missing E-Way bill must be valued using transaction value from tax invoice under Section 15(1)

The HC held that goods detained for lack of E-Way bill should be valued based on transaction value shown in the tax invoice under Section 15(1) of the Act, not through alternative valuation methods under Section 15(4). The court ruled that petitioner, as owner of goods per established precedent, should be treated under Section 129(1)(a) rather than Section 129(1)(b). The penalty order imposing burden on petitioner was declared bad in law. Court directed respondents to release goods upon petitioner paying 200% of tax payable based on invoice valuation, allowing the petition through remand.

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Issues involved:
The issues involved in the judgment are detention of goods due to absence of E-Way bill, jurisdiction of detaining authority to value goods, applicability of Section 129(1)(a) and Section 129(1)(b) of the U.P. GST Act, and determination of value of goods in transit.

Detention of Goods:
The petitioner ordered mixed ready-made garments which were being transported when intercepted and physically verified. Despite no discrepancy in the quantity, the goods were detained on 21.09.2022 for lacking an E-Way bill. The detention order did not follow the prescribed format, raising procedural concerns.

Jurisdiction and Valuation:
The detaining authority imposed a penalty on the goods without E-Way bill, questioning the authority's jurisdiction to value the goods. The petitioner argued that if Part - B of the E-Way Bill was not carried, no penalty should be imposed. The petitioner contended that the valuation of goods was done without proper jurisdiction.

Applicability of Sections 129(1)(a) and 129(1)(b):
The petitioner asserted that Section 129(1)(a) should apply instead of Section 129(1)(b) as they were the owner of the goods based on the invoice. It was argued that as consignor or consignee, the petitioner should be treated as the owner, making Section 129(1)(b) inapplicable.

Determination of Value of Goods:
The judgment analyzed Section 15 of the Act for the levy and collection of tax and the determination of the value of supply. Rule 138 of CGST Rules and Explanation 2 clarified the consignment value of goods based on the invoice, bill of supply, or delivery challan. The transaction value as per the tax invoice was deemed acceptable, and the petitioner was considered the owner of the goods.

Conclusion:
The impugned orders dated 26.09.2022 and 19.10.2022 were set aside as they imposed an incorrect burden on the petitioner under Section 129(1)(b) of the Act. The matter was directed to the Assessing Authority for fresh orders, but the respondents were instructed to release the goods upon the petitioner's offer to pay two hundred percent of the tax payable. The petitioner's readiness to pay under Section 129(1)(a) led to the release of goods, and the detained vehicle was to be released upon payment. The writ petition was allowed accordingly, and proceedings were to comply with Section 129(5) of the Act.

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