Introduction
The Goods and Services Tax (GST) Act, 2017, is a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India. It has replaced several cascading taxes levied by the central and state governments. One of the critical sections of this Act is Section 129 of the GST Act, which deals with the detention, seizure, and release of goods and conveyances in transit.
Section 129 Of the GST Act: An Overview
Section 129 of the GST Act is designed to ensure compliance with the tax laws during the transportation or storage of goods. The section states:
| Provisions | Description |
|---|---|
| Detention or Seizure | If any person transports or stores goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure. |
| Release after Detention or Seizure | The detained or seized goods shall be released on payment of the applicable tax and penalty. |
Case Study: Allahabad High Court Ruling
Recently, a case related to Section 129 came before the Allahabad High Court. The court’s decision provides valuable insights into how this section is interpreted and applied.
Facts of the Case
The petitioner’s goods were being transported from New Delhi to Telangana when they were intercepted at Agra. After physical verification, it was found that part B of the e-way bill accompanying with the goods was not filled. A notice was issued proposing to impose tax at 18% and an equal amount of penalty.
Arguments Presented
The petitioner argued that authorities should not have seized the goods on technical glitches as they were sold by one registered dealer to another registered dealer and were accompanied by genuine tax invoices. It was contended that Part-B of the e-way bill was to be completed by the transporter, proceedings could not have been initiated against the petitioner.
Court’s Decision
The Allahabad High Court refused to quash penalty order passed under Section 129 on the ground that petitioner cannot be permitted to argue the case without there being any pleading in support of his arguments. The court held that no proceedings under section 73, 74 or 75 of the Act have also been initiated against the petitioner for determination of the tax liability.
Conclusion Of Section 129 Of the GST Act
This case highlights the importance of adhering to all provisions of the GST Act during transportation or storage of goods. It underscores that even technical glitches can lead to penalties under Section 129. Therefore, it is crucial for all stakeholders involved in transportation or storage of goods to understand and comply with all provisions of this Act.
