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Issues: (i) Whether detention and penalty under the GST enactment were justified when the goods were intercepted with only a delivery note and not the prescribed delivery challan. (ii) Whether the petitioner could avoid the tax and penalty order by asserting that the goods were sent on approval basis and that the payment was extracted under duress.
Issue (i): Whether detention and penalty under the GST enactment were justified when the goods were intercepted with only a delivery note and not the prescribed delivery challan.
Analysis: Goods in transit in contravention of the statutory requirements are liable to detention and release is conditioned by the scheme of Section 129. Movement without the prescribed documentation was examined with reference to Rule 55 and Rule 138A, which contemplate a delivery challan as the recognised document for transportation where goods are moved for reasons other than immediate supply. A delivery note was held to be different from a delivery challan and not a prescribed substitute. On the record, the person in charge of the goods produced only a delivery note, and no valid delivery challan was shown at interception.
Conclusion: The detention and levy of tax and penalty were upheld.
Issue (ii): Whether the petitioner could avoid the tax and penalty order by asserting that the goods were sent on approval basis and that the payment was extracted under duress.
Analysis: Goods sent on approval basis may move under a delivery challan and the invoice may follow on delivery, but the necessary supporting document was not produced at interception. The contemporaneous declaration recorded ownership of the goods and willingness to pay tax and penalty, and the later plea of coercion was not accepted. The written acceptance of liability and voluntary payment were treated as inconsistent with the claim of duress, and the plea was also unsupported by the appellate record.
Conclusion: The challenge based on approval basis and alleged coercion was rejected.
Final Conclusion: The impugned orders were found free from infirmity, and the writ petition was dismissed.
Ratio Decidendi: Where goods in transit are not accompanied by the prescribed delivery challan and the owner contemporaneously accepts liability and pays tax and penalty, detention and penalty under the transit provisions are sustainable, and a later plea of coercion will not displace the statutory consequence absent reliable supporting material.
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