2023 (12) TMI 514 - HC - GST

Detention and release of goods under Section 129 of CGST Act confirmed release when owner produces invoice and e way bill.

Detention and release of goods under the CGST Act turns on documentary compliance: where the owner produced the tax invoice and valid e way bill, the ... Release of goods under Section 129(1)(a) of the CGST Act - release of goods under Section 129(1)(b) of the CGST Act - owner of the goods deemed where tax invoice and E-way bill accompany consignment - applicability of Circular No.76/50/2018-GST dated 31st December 2018Owner of the goods deemed where tax invoice and E-way bill accompany consignment - release of goods under Section 129(1)(a) of the CGST Act - applicability of Circular No.76/50/2018-GST dated 31st December 2018 - Whether goods seized in transit were liable to be released under Section 129(1)(a) of the CGST Act where the petitioner produced the tax invoice and E-way bill and claimed to be the owner. - HELD THAT: - The Court applied the clarification in Circular No.76/50/2018-GST dated 31st December 2018 and the consistent Division Bench precedents of this Court which hold that where a tax invoice and E-way bill accompany a consignment, the consignor or consignee who produces those documents before the authorities is to be treated as the owner of the goods for the purposes of Section 129(1). In the present case the petitioner produced the tax invoice and E-way bill and goods were found to be as per those documents. On that basis the petitioner is to be deemed the owner and the statutory scheme requires release in terms of Section 129(1)(a) (payment of applicable tax and penalty as specified therein) rather than under Section 129(1)(b). The order passed by the authorities determining penalty under Section 129(1)(b) was therefore inconsistent with the statutory provision as interpreted in light of the Circular and binding Division Bench decisions, and is liable to be quashed and set aside. The Court directed the authorities to carry out the exercise under Section 129(1)(a) within three weeks. [Paras 11, 12]Order dated October 19, 2023 is quashed and set aside; authorities directed to release the goods in accordance with Section 129(1)(a) of the CGST Act within three weeks.Final Conclusion: Writ petition allowed insofar as the challenge to the order under Section 129; goods to be released in terms of Section 129(1)(a) on the petitioner producing the tax invoice and E-way bill, and the impugned order is quashed. Issues Involved:The judgment involves the detention of goods and vehicle under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the subsequent release of the goods.Detention of Goods and Vehicle:The main issue in the writ petition is whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act. The petitioner, the owner of the goods, argued for release under Section 129(1)(a) while the authorities calculated penalties under Section 129(1)(b) of the CGST Act.The petitioner received an order for supply of goods, which were loaded on a vehicle and intercepted in the State of U.P. The goods were found to be as per the invoice and E-way bill. Despite the petitioner being the owner, the authorities detained the goods and imposed penalties under Section 129(1)(b) of the CGST Act.Legal Interpretation and Precedents:The petitioner cited Circular No.76/50/2018-GST to support their claim that the goods should be released under Section 129(1)(a) if the invoice or specified document accompanies the consignment. Additionally, the petitioner relied on previous judgments where it was held that when the owner produces tax invoice and E-way bill, the goods belong to the owner and penalties should be calculated under Section 129(1)(a) of the CGST Act.The Division Bench judgments highlighted the applicability of Circular dated December 31, 2018, stating that when the owner produces necessary documents, the goods are deemed to belong to the owner, warranting release under Section 129(1)(a) of the CGST Act.Judgment and Direction:Considering the evidence and legal principles, the court quashed the authorities' order and directed the release of goods under Section 129(1)(a) of the CGST Act. The authorities were instructed to carry out the release within three weeks. As the petitioner did not press for other prayers, they were advised to pursue them in the appropriate forum.Therefore, the writ petition was allowed based on the above directions, emphasizing the application of Section 129(1)(a) for the release of goods in this case.