TaxTMI 
TaxTMI 
Contravention of Section 129
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....ontravention of Section 129<br>By: - K Balasubramanian<br>Goods and Services Tax - GST<br>Dated:- 28-2-2025<br>Contravention of the provisions contained in Section 129 of the CGST ACT 2017. 1. When a taxpayer contravenes any of the provisions of the CGST Act, 2017 there are adequate provisions to safeguard the REVENUE. What happens when the tax authority contravenes section 129 of the CGST Act 2....
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....017? The High Courts are passing orders to the effect that the invocation of Section 129 in the case was unwarranted and close the issue be setting aside such orders passed in contravention of Section 129 by the tax officer. What happens to the hardship the taxpayer goes through as vehicle is detained and high value goods are with the custody of tax officials till such time the issues get re....
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....solved. 2. The moot question is whether Section 129 of the CGST Act 2017 is to be adhered only by the taxpayer and the tax officials are not bound to enforce the invocation of the Section 129 JUDICIOUSLY. 3. It is not the case that Section 129 is always wrongly enforced by the Tax Officials as the fact remains that in selected cases, High Courts have held that detention is justified. However, it....
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.... is observed that in majority of the cases, where Section 129 is invoked, Courts have held that there was no proper justification for such invocation. This article analyses few such most recent rulings of the High courts to create awareness amongst the taxpayers who face similar issues. 4. High Court of Allahabad in the case of M/S RAGHUVEER ISPAT PRIVATE LIMITED VERSUS STATE OF U.P. AND 2 OTHERS....
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.... - 2024 (5) TMI 1399 - ALLAHABAD HIGH COURT held that technical violation of e way bill expiry due to vehicle breakdown where the description matched with the goods and no intention to evade tax was established, imposition of tax and penalty was set aside. The orders dated 09/12/2017 of the Tax Authority and order dated 08/05/2019 of the Appellate Authority were quashed and set aside on 29/05....
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..../2024 resulting in refund of tax and penalty. However, the battle was live for seven years. 5. High Court of Madras in RNYN STEEL, REPRESENTED BY ITS PROPRIETOR MR. RAJESH GOENKA VERSUS THE ASSISTANT COMMISSIONER (ST) , CHENNAI - 2025 (1) TMI 582 - MADRAS HIGH COURT that the penalty amount was to be set aside as the penalty was imposed without considering the proper e waybill as well as corr....
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....ect description. The court also observed that the physical verification report of the Tax Authority also indicates that there are no reasons justifying the detention or levy of penalty, but the goods were detained and released only on payment of penalty of Rs.5,11,928. This penalty was ordered to be adjusted against the tax liability of the taxpayer. 6. High Court of Andhra Pradesh in the case of....
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.... SFC ENVIRONMENTAL TECHNOLOGIES LIMITED VERSUS UNION OF INDIA AND OTHERS - 2024 (12) TMI 1124 - ANDHRA PRADESH HIGH COURT held on 18/12/2024 wherein confiscation of goods and conveyances in transit was ordered that consequent to collection of penalty, the order passed confirming the penalty was in clear violation of procedures set under the act and also the order was passed in vio....
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....lation of principles of natural justice. Accordingly, the High Court set aside the order and remanded the case for fresh consideration. 7. The Bench headed by the Chief Justice of Calcutta High Court on 11/02/2025 in the case of ASHOK SHARMA VERSUS THE STATE OF WEST BENGAL & ORS. - 2025 (2) TMI 1002 - CALCUTTA HIGH COURT held that it is not a case where procedures under section 129 of the Ac....
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....t could have been drawn and goods could be detained, and penalty could be imposed. According, order was set aside and pre deposit was ordered to be refunded. 8. High Court of Allahabad on 09/07/2024 in the case of M/S RAM KRISHNA GUPTA VERSUS STATE OF U.P. AND 2 OTHERS - 2024 (7) TMI 916 - ALLAHABAD HIGH COURT held that mere technical error in e way bill does not justify penalty or adv....
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....erse inference of tax evasion. In this case, e way bill, tax invoice, R R are available and only issue was part B of e way bill was not filled due to technical error. It was held that the order passed imposing penalty could not sustain law and order is set aside with instruction for refund of penalty already paid. 9. High court of Allahabad on 04/07/2024 held in the case of M/S NANHEY MAL MUNNA L....
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....AL VERSUS ADDITIONAL COMMISSIONER AND ANOTHER - 2024 (7) TMI 613 - ALLAHABAD HIGH COURT that mere typographical errors are not the ground for levy of penalty. The selling dealer as well as purchasing dealer had active GSTIN and goods accompanied e way bill and tax invoice. The only issue was that the dates mentioned in e way bill and tax invoice did not match. Authorities imposed penalty and ....
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....the High Court held that the order can not sustain and was accordingly set aside with instructions for refund of penalty amount. 10. The above cases are only illustrative and, in many cases, the taxpayer is forced to knock the doors of the High Court by way of Writ Petition as the GSTAT is not in place even in the eighth year of GST. In order to reduce the cases arising under Section 129, taxpaye....
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....rs are cautioned to ensure that proper documents such as e way bill and tax invoice etc. are accompanying the goods during transportation. An attempt may be made to ensure that such documents are correct in all required aspects to avoid any undesired detention of goods. Officers with whom the responsibility of interception of goods are vested may take note of the recent judicial develo....
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....pments and pass orders under section 129 appropriately.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....