WPA 321 of 2023-CAL HC- Section 129 of SGST Act, which deals with detention, seizure and release of goods “in transit”,  is to be invoked when goods are in movement on conveyance, clarifies Calcutta HC 
Justice Amrita Sinha [10-03-2023]

Read Order: Sandip Kumar Singhal v. Deputy Commissioner, Revenue, Bureau of Investigation North Bengal Headquarter & Ors 

Tulip Kanth

Jalpaiguri, March 13, 2023: When the goods were held to be in transit, then notice under Form GST MOV ought to have been issued, the Jalpaiguri Bench of the Calcutta High Court has observed while considering a challenge to an Order affirming that the petitioner acted in contravention of Section 67(2) read with Section 129 of the State Goods and Services Tax Act, 2017.

“ Section 129 deals with detention, seizure and release of goods and conveyances “in transit”. The said provision is to be invoked when the goods are in movement on a conveyance”, the Bench said.

The facts of the case were such that the goods of the petitioner were seized on 22nd February 22, 2022 from a godown upon invoking the provision of Section 67(2) of the said Act. The order of seizure issued in Form GST INS-02 mentioned that, on inspection of the goods under Section 67(1) and on scrutiny of the books of accounts, registers, documents/papers and goods found during inspection/search there were reasons to believe that the goods were liable to be confiscated and the same were seized by invoking power under Section 67(2) of the Act. 

A report of satisfaction that the goods were liable to be confiscated was prepared on the same date and the e-way bill status of the goods mentioned that the e-way bill already expired on the date of inspection and seizure.

The  E-way bill was generated on February 9, 2022 for transporting fifteen thousand kilograms of cumin seeds and the same was valid upto  February 20, 2022. The goods were dispatched from Gujrat and were to reach Siliguri, West Bengal. The goods were confiscated from a godown which the petitioner claimed to be three kilometres ahead of the final destination point mentioned in the eway bill.

Hearing was conducted and the authorized representative of the addressees allegedly failed to explain the reason behind the expiry of e-way bills in respect of the goods lying in the godown.The adjudicating authority opined that the goods were transported and stored while they were in transit in contravention of Section 129 and calculated the applicable penalty under Section 129 (1) (a).On payment of the penalty amount the goods of the petitioner were released.

Being aggrieved by the order of the adjudicating authority, appeal was preferred and the appellate authority affirmed the order passed by the adjudicating authority. 

The Bench noticed the fact that the goods were in order but the corresponding e-way bill expired. The authority was of the opinion that as the goods did not reach the endpoint as mentioned in the eway bill, the goods were in transit. 

The Bench further held that though the authority found the goods stored in the godown to be of a lesser quantity but the authority never questioned the identity and quantum of the goods apropos the expired e-way bill.

“It appears that though initially the authority invoked the provision of Section 67 but thereafter shifted stand and relied upon Section 68 read with Section 129 for imposition of penalty. The authority was in a fix as to which provision to invoke for imposition of penalty. At one point of time the goods were held to be stored in the godown without the proper documents and without a valid e-way bill and immediately thereafter, the goods were held to be in transit. A single consignment of goods cannot be held to be stored in the godown and to be in transit, simultaneously, at the same time”, the High Court stated.

Stating that Section 129  couldnot be relied upon to penalize the RTP when the goods are seized from a godown and the goods were not confiscated while on the move, the Bench held that it did not appear that the authority acted in accordance with the appropriate legal provisions and instead penalised the petitioner in a mechanical manner without proper application of mind.

Thus, setting aside the impugned order of the adjudicating authority and the appellate forum, the Bench directed the respondent authority to refund the amount collected from the petitioner as penalty positively within four weeks.