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March 10, 2023

Due to the expiration of the e-way bill, the detention of the goods under Section 129 of the CGST Act is valid

by CA Shivam Jaiswal in GST, GST Circular Notification

Due to the expiration of the e-way bill, the detention of the goods under Section 129 of the CGST Act is valid

Fact and issue of the case

By filing the instant writ petition, the petitioner has assailed and imposition of SGST and penalty for the year 14th March, 2022 passed by the Assistant Commissioner, Bureau of Investigation (North Bengal) Headquarter.

It is the case of the petitioner that the petitioner is the manufacturer/supplier of milestone Bitumen Emulsion and Allied products. The petitioner is a Registered Taxable Person duly registered under the GST Act with specific GSTIN number. In course of business, the petitioner supplied 158 drums of Bitumen Emulsion containing 200 kgs in each drum, in all measuring about 31,600 kgs with invoice No.555/2021-22 dated 5th March, 2022 generating proper E-Way bill dated 5th March, 2022 which was valid up to 9th March, 2022 from Begusarai to Guwahati. For the purpose of transporting the said goods the petitioner paid IGST at the rate of 18% amounting to Rs.2,58,804. On payment of IGST E-Way bill was generated for transportation of the said goods from Begusarai to Guwahati. In course of transportation the good carriage suffered from breakdown and it was detained in a motor vehicle garage within the jurisdiction of Jalpaiguri. The vehicle was intercepted by the State Tax Officer on 12th March, 2022 and on inspection it was found that E-Way bill in respect of the consignment had expired. Subsequently, the Assistant Commissioner, Bureau of Investigation Headquarter imposed SGST at the rate of Rs.2,58,804/-and penalty on SGST to the tune of Rs.7,18,900 and asked the petitioner to pay the said tax with penalty. In order to release the vehicle the petitioner had to pay tax and the vehicle, but preferred an appeal before the appellate authority. By an order dated 23rd August, 2022 the appeal was dismissed.

Learned Advocate for the petitioner submits that validity of E-Way bill expired on the expiry of 9th March, 2022. The vehicle was intercepted on 12th March, 2022. Thereafter SGST and penalty was imposed as the E-Way bill has expired. It is submitted by the learned Advocate for the petitioner that the petitioner has no intention to evade tax. He paid IGST at the rate of 18% on the value of the goods and procured E-Way bill. However, it was not within the control of the petitioner that there would be mechanical defect of the said truck. Under such circumstances, the respondent authority cannot impose any SGST and fine on the ground that the E-Way bill had expired.

Observation of the court

Section 129 of the Central Goods and Services Tax Act, 2017 empowers the statutory authority to detain the vehicle and seize the goods. The goods shall be released only on payment of penalty equal to 200% of the tax payable on such goods.

Under the fact and circumstances of the case this Court finds that the respondent authority is lawfully permitted to impose penalty under Section 129 as well as the SGST as the goods were found to be detained in the territory of the State.

In view of such circumstances, the ratio laid down in M/s Hanuman Ganga Hydroprojects Private Limited (supra) and Ashok Kumar Sureka (supra) are not applicable in the instant case.

For the reasons stated above, the writ petition is dismissed on contest however, without any costs.


In the result, appeal of the assessee is allowed and ruled in favour of the assessee

Read the full of order from here


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