Introduction
If your goods or vehicle have been detained under GST and you paid the penalty after the 15 day window, you may still have a legal right to get them back. The Andhra Pradesh High Court recently ruled that goods and vehicles must be released once the penalty under Section 129 of the GST Act is paid even if payment comes after the prescribed 15 day limit. This ruling came in the case of Sai Krishna Contract Works, where a truck carrying iron and metal scrap was detained by GST officials. The court held that continued detention was illegal since no confiscation proceedings were started after the deadline passed. This article breaks down the judgment, explains what Section 129 means for business owners and transporters, and outlines the practical steps you should take if your goods are ever detained.
Case at a Glance
| Detail | Information |
| Case Name | Sai Krishna Contract Works vs Deputy Assistant Commissioner |
| Case Number | Writ Petition No. 32212/2025 |
| Court | Andhra Pradesh High Court |
| Date of Judgment | 31 December 2025 |
| Bench | Justice R. Raghunandan Rao & Justice T.C.D. Sekhar |
| Goods Detained | Iron and metal scrap (transported by truck) |
| Date of Detention | 7 September 2025 |
| Penalty Imposed | 19 September 2025 |
| Key Ruling | Release goods and vehicle even if penalty paid beyond 15 day limit |
What Is Section 129 of the GST Act?
Section 129 of the Central Goods and Services Tax (CGST) Act, 2017, gives GST officers the power to detain, seize, and release goods and vehicles that are found violating GST rules while in transit. This could include missing e-way bills, incorrect invoices, or undeclared goods.
When goods are detained, the owner has the option to pay the penalty and secure their release. The penalty amount depends on who comes forward to pay:
1. If the owner comes forward: Penalty = 200% of the tax payable on the goods
2. If the owner does not come forward: Penalty = 50% of the goods’ pre-tax value
3. For exempted goods: 2% of the goods’ value or Rs. 25,000, whichever is less
The 15 day Rule Under Section 129(6)
Under Section 129(6), if the penalty is not paid within 15 days from the date of detention, the detained goods and vehicle are liable to be confiscated or sold under Section 130 of the CGST Act. For perishable or hazardous goods, this window can be shortened at the officer’s discretion.
What Happened in the Sai Krishna Case?
A truck belonging to Sai Krishna Contract Works was stopped on 7 September 2025 while transporting iron and metal scrap. Tax officials detained the truck and issued a penalty order on 19 September 2025. The company paid the full penalty amount but only after the 15 day deadline had passed.
Despite the payment, authorities refused to release the goods and vehicle, citing the late payment. The petitioner approached the Andhra Pradesh High Court, arguing that once the penalty was paid, the continued detention was unlawful.
What Did the Court Decide?
The Division Bench comprising Justice R. Raghunandan Rao and Justice T.C.D. Sekhar ruled clearly in favour of the petitioner. The court observed:
1. Payment of penalty was made, even if delayed beyond the 15 day window
2. No confiscation proceedings were initiated by the authorities after the deadline
3. Without active confiscation proceedings, continued detention served no legal purpose
4. The detention was therefore deemed illegal and unjustified
The court directed the authorities to release the goods and the vehicle immediately.
Why This Ruling Matters for Businesses and Transporters
This judgment is significant for anyone who moves goods under GST whether you are a business owner, transporter, or logistics company. Here is why:
| Scenario | What the Law Says | What This Ruling Confirms |
| Penalty paid within 15 days | Goods must be released | No change – always applicable |
| Penalty paid after 15 days | Goods potentially liable for confiscation | Goods must still be released if no confiscation order issued |
| No confiscation order passed | Detention has no further legal basis | Continued detention is illegal |
| Confiscation proceedings initiated | Separate process under Section 130 applies | Not covered by this ruling |
Sections 129 and 130 Are Separate
The court reinforced an important legal principle: Section 129 (detention) and Section 130 (confiscation) are independent processes. Authorities cannot simply hold goods indefinitely under the detention powers of Section 129 without moving to formal confiscation under Section 130. If they fail to take that next step within the window, the detention loses its legal standing.
Practical Tips for GST Compliance During Goods Transit
1. Always carry proper documentation – valid tax invoice, e-way bill, and delivery challan
2. Check e-way bill validity before dispatching – an expired bill is a common reason for detention
3. If detained, respond promptly and engage a GST consultant or legal advisor immediately
4. Pay the penalty as soon as possible, even if beyond the 15 day window – this ruling protects you
5. Track whether confiscation proceedings (Section 130) have been formally initiated; if not, your goods must be released
6. Document everything all receipts, correspondence, and orders issued by tax officers
Conclusion
The Andhra Pradesh High Court’s ruling in the Sai Krishna Contract Works case is a clear reminder that GST detention powers have limits. Paying the penalty even late is sufficient to secure the release of your goods and vehicle, provided the authorities have not formally begun confiscation proceedings under Section 130.
For business owners and transporters, this judgment reinforces the importance of understanding your rights under the GST Act. Tax authorities must follow due process, and courts have shown willingness to step in when procedural safeguards are ignored.
The key takeaway: Pay the penalty, document everything, and do not accept prolonged detention without legal justification. If your goods are being held beyond what the law allows, the courts are on your side.
Frequently Asked Questions (FAQs)
Can the authorities confiscate goods if penalty is paid late?
Not automatically. They must formally initiate confiscation proceedings under Section 130 within the stipulated period. If no such proceedings are started, the goods and vehicle must be released once the penalty is paid, even if payment is delayed.
What is the penalty amount under Section 129 for detained goods?
If the owner comes forward, the penalty is 200% of the tax payable on the goods. If the owner does not come forward, it is 50% of the goods’ pre-tax value. For exempt goods, it is 2% of the value or Rs. 25,000, whichever is lower.
Can I approach the High Court if my goods are wrongfully detained?
Yes. As seen in this case, taxpayers can file a writ petition in the High Court if the continued detention is illegal or if their constitutional rights are being violated. Courts have regularly ruled in favour of taxpayers when proper procedure is not followed.
Does this ruling apply across all states in India?
This is an Andhra Pradesh High Court ruling and is binding within the state’s jurisdiction. However, it reflects a consistent legal principle that other High Courts across India have also upheld, making it persuasive authority in similar cases elsewhere.
What should I do if my vehicle is detained during goods transit?
Act quickly. Collect all detention documents, pay the penalty amount at the earliest, request a written acknowledgement of payment, and consult a GST professional if the goods are not released. If confiscation proceedings are not formally initiated, you have a strong legal position for release.
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