Consigner shall be deemed to be owner of goods found with proper tax invoice, e-way bill
In a recent judgment, the Hon’ble Allahabad High Court has held when goods intercepted were found with proper tax invoice and E-way bill belonging to the petitioner, the petitioner would be deemed to be the owner of the goods as per Section 129(1)(a) of CGST Act 2017 and the goods shall be released accordingly.
ABCAUS Case Law Citation:
4211 (2024) (08) abcaus.in HC
In the instant case, the question was as to whether the goods may be released by the GST authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act, 2017 (the Act).
Section 129 of the CGST Act 2017 deals with detention, seizure and release of goods and conveyances in transit. Sub section (1)(a) provides for a penalty equal to two hundred per cent. of the tax payable on such goods where the owner of the goods comes forward for payment of such penalty, whereas sub section (1)(b) provides for a more stringent penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher in cases where the owner of the goods does not come forward for payment of such penalty.
In the instant case, the Petitioner had filed a writ petition under Article 226 of the Constitution of India, challenging the actions of the GST authorities with regard to detention of the goods and vehicle of the petitioner as well as subsequent orders of penalty passed under Section 129(1)(b) of the Act.
The main contention of the petitioner was that the petitioner was the owner of the goods and, therefore, detained goods were to be released as per Section 129(1)(a) of CGST Act while the GST authorities had made the calculation of penalty under Section 129(1)(b) of the Act.
The Petitioner submitted that the present case is squarely covered by the judgment of the Hon’ble High Court.
The Hon’ble High Court observed that the facts and issue in the present writ petition were quite similar to one decided by the Court as relied upon by the petitioner. In the said case, the petitioner therein having GST registration at Calcutta received an order for supply from a party at Delhi. Subsequently, the goods were loaded on the vehicle and sent along with invoice and E-way bill. When the goods were on its way from Calcutta to New Delhi, the same were intercepted in the State of UP. A physical verification was carried out and it was found that there was no discrepancy in relation to the consignment and the goods were as per the invoice and E-way bill. However, goods were detained on the ground that both the consignor and consignee were declared as non-existent. Whereas on the date of interception the petitioner therein was having a registration under the CGST Act. The said registration was subsequently suspended by the GST authorities at West Bengal. Upon the detention the petitioner therein being the owner of the goods sought for release of the goods under Section 129(1)(a) of the CGST Act. However, the authorities levied the penalty under Section 129(1)(b) of the CGST Act. The Hon’ble High Court had held that goods were found with proper tax invoice and E-way bill belonging to the petitioner. Hence, Circular No. 76/50/2018-GST dated 31-12-2018 would apply and the petitioner would be deemed to be the owner of the goods. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act.
The Hon’ble High Court stated that there was no reason why the Court should take a different view of the matter. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act.
Accordingly, the Hon’ble High Court quashed and set aside the order passed by the authorities. The authorities were directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act.
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