06.01.2023: Mere Expiry Of E-Way Bill Cannot Be A Ground For Detention Of Goods Under Section 129 – Gujarat High Court

gujarat-high-courtThe Hon’ble High Court of Gujarat vide its order dated 01.12.2022 in the matter of Shree Govind Alloys Pvt. Ltd. Vs. State of Gujarat in R/Special Civil Application No. 23835 of 2022, held that the detention of goods for expiration of E-way Bill during the transit cannot be a ground for detaining and seizure of goods along with vehicle under Section 129.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the authority of the respondent demanding the sum of Rs. 7,53,364/- as demand of tax and penalty by an order dated 04.11.2022 passed under Section 129(3) of the CGST Act, 2017 and has prayed for quashing of the same.  It was also prayed to quash and set aside the order of detention passed under Section 129(1) of the Act read with Section 20 of the IGST Act, 2017 dated 19.10.2022 as well as the notice under Section 129 issued on the same date.  Further, directions were sought to the respondents to release the goods along with the impugned vehicle bearing no. GJ-12BW – 8082 and also to grant interim relief by ordering release of goods with any condition.

It was submitted on the behalf of the petitioner that the truck had remained in non-motorable condition and thus, the goods which were to be delivered on or before 17.10.2022 could not be delivered in time and on 19.10.2022 at the time of inspection, it came to the knowledge of the officer that the E-way Bill has expired and therefore, the entire truck along with the impugned goods has been seized. The petitioner has been issued GST Form MOV No.1,2,6 and 7 where he was called upon to remain present and eventually the order dated 04.11.2022 was passed demanding the tax and penalty.

On the other hand, it was submitted on the behalf of the respondent authority that goods bearing invoice value of Rs. 24,69,358/- along with Conveyance No. GJ-12-BW-8082, were detained on the ground that E-Way bill had expired 41 hours before the time of interception.  Further, the period between the expiry of validity of E-Way bill and time of interception was not substantiated and no justification was given by conveyance driver. There was no satisfactory reason for non-updation of the E-Way bill which was given.

Held: –

  • The Hon’ble Court after considering the submissions made, facts of the and the material placed on record, took note of the provisions of Section 129 of the CGST Act.
  • Thereafter, it was found by the Hon’ble Court that there is not dispute that E-Way Bill expired 41 hours before the time of interception by the concerned authority. It was noticed that the detention is also on the ground that the E-Way had expired during the transit and the same cannot be ground for detaining and seizure of M.S. Billet along with the vehicle truck.
  • The Hon’ble Court taking reference of the judgments in the matter of Govind Tobacco Manufacturing Co. vs. State of U.P., (Allahabad) and the judgment of M/s. Daya Shaker Singh vs State of Madhya Pradesh passed in Writ Petition No.12324 of 2022 on 10.08.2022 – Madhya Pradesh High Court, wherein it was held by the Courts that the vehicle not to be detained and seized, if there is not intention to evade payment of tax.

The Hon’ble High Court with the above findings, allowed the writ petition by setting aside and quashing the impugned order of detention dated 19.10.2022 as well as the notice issued under Section 129(3) dated 19.10.2022.

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