K.P. Sugandh Ltd. v. State of Chhattisgarh 2020 [38] G.S.T.L, 317 (High Court – Chhattisgarh)

Under valuation of goods in the invoices cannot be made ground for detention and seizure of the said goods and vehicle in transit for the initiation of proceeding under section 129 read with Rule 138. 

Facts: In this case, the Petitioner dispatched goods (Pan Masala and Tobacco Products) along with tax invoice and e-way bill to its customer located at Raipur. The vehicle was intercepted in between transit by the Department officials when the conveyance-in-charge immediately produced the relevant invoice bill and e-way bill as required under the CGST Act 2017. Despite the fact that necessary documents accompanying the consignment were duly produced, the Officer seized & detained the vehicle and the goods on the ground that there is alleged discrepancy in the valuation of such goods.

Issue: Whether discrepancies in valuation of goods can be a ground for detention of goods under transport.

Held: The Hon’ble Chhattisgarh High Court, after going through the facts of the case held that ‘merely because the manufacturer sells his products to its customers at a price lower than the MRP, as such cannot be made ground on which the product or the vehicle could be seized or detained.’ It was further held that at the time of inspection, the details in the tax invoice as well as the e-way bill were in reconciliation with the products found in the vehicle except for the price of sale, for which, even if required, Inspecting Authorities (rather than detaining and seizing the goods) could have intimated the Assessing Authority for the alleged discrepancy and initiating appropriate proceedings upon Petitioner.


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