2023 (9) TMI 957 - HC - GST

Transporting Goods: Proper Documents Protect Carriers from Penalties Under CGST Act Section 129(1)

HC ruled that goods and vehicle should be released when proper transportation documents (E-Way bill and invoice) are present. The carrier cannot be held ... Release of goods and vehicle under Section 129(1)(a) of the CGST Act - Liability to pay penalty under Section 129(1)(b) of the CGST Act - Applicability of Board circular dated 31.12.2018 regarding determination of 'owner of the goods' - Right to statutory appeal under Section 107 of the CGST ActRelease of goods and vehicle under Section 129(1)(a) of the CGST Act - Applicability of Board circular dated 31.12.2018 regarding determination of 'owner of the goods' - Goods in transit accompanied by invoice and E way bill were to be released on payment of penalty under Section 129(1)(a) in accordance with the Board circular dated 31.12.2018. - HELD THAT: - The department did not dispute that the consignment was accompanied by the requisite documents including the E Way bill and invoice. The Board circular of 31.12.2018 clarifies that where the invoice or other specified document accompanies the consignment, either the consignor or consignee is to be deemed the owner for the purposes of Section 129(1). In those circumstances the authority ought to have considered the petitioner's prayer for release under Section 129(1)(a) rather than fixed liability under Section 129(1)(b). The court accordingly directed respondents to act in terms of the circular and to release the goods and vehicle upon compliance with the condition stipulated in Section 129(1)(a).Respondents directed to release the goods and vehicle on compliance with Section 129(1)(a) and in accordance with the Board circular dated 31.12.2018.Liability to pay penalty under Section 129(1)(b) of the CGST Act - Right to statutory appeal under Section 107 of the CGST Act - Questions regarding the demand of tax and the correctness of penalty fixation under Section 129(1)(b) were not adjudicated and are to be ventilated in the statutory appeal mechanism. - HELD THAT: - The State submitted that challenges as to demand of tax are triable by way of appeal under Section 107. The court expressly left all other questions open for examination in the statutory appeal to be filed before the appropriate authority, thereby refraining from deciding the merits of any tax or penalty demand beyond the limited direction to release the goods in accordance with the circular and Section 129(1)(a).All other questions, including the correctness of tax demand and penalty fixation, are left open to be decided in the statutory appeal.Final Conclusion: Writ petition disposed with direction to respondents to release the goods and vehicle upon compliance with Section 129(1)(a) and the Board circular dated 31.12.2018; all other contested questions, including tax and penalty claims, to be decided in the statutory appeal mechanism. Issues involved:The liability to pay penalty under Section 129(1)(b) of the CGST Act, 2017 and the release of goods and vehicle seized by the authorities by accepting penalty under Section 129(1)(a) of the GST Act.Liability to pay penalty under Section 129(1)(b):The petitioner challenged an order fixing liability to pay penalty under Section 129(1)(b) of the CGST Act, 2017. The petitioner argued that based on a circular issued by the Board, if the invoice or specified document accompanies the goods, either the consigner or consignee should be deemed as the owner. As the goods transported were accompanied by necessary documents including an E-Way bill and invoice, the petitioner, being a carrier, should have been treated as the owner. The State counsel acknowledged the documents accompanying the goods and did not dispute the applicability of the circular dated 31.12.2018. The High Court directed the authorities to release the goods upon compliance with Section 129(1)(a) of the Act, as per the circular.Release of goods and vehicle seized:The High Court noted that the authorities should have considered the petitioner's request for the release of goods and the vehicle, given the compliance with Section 129(1)(a) of the Act. The Court emphasized that since the necessary documents were with the goods in transit, the authorities should act in accordance with the circular and release the goods. The Court left other questions open to be examined in a statutory appeal to be filed before the appropriate authority.Therefore, the writ petition was disposed of with a direction to release the goods upon compliance with Section 129(1)(a) of the Act, based on the circular's clarification regarding the ownership of goods when accompanying specified documents.