Tax authorities to detain goods only in the case of deliberate tax evasion and not for technical or minor defects

NE Equipment Solutions Pvt. Ltd. Vs State of Tripura and others (Tripura High Court)

Tax authorities to detain goods only in the case of deliberate tax evasion and not for technical or minor defects

NE Equipment Solution Pvt. Ltd. (Petitioner) approached the Hon’ble Tripura High Court primarily for release of the machinery which was intercepted by the GST authorities on the ground that the driver did not have valid e-way bill for the machinery being brought within the State.

Further, the Superintendent of Taxes, Churaibari Enforcement Wing issued a show-cause notice dated August 19, 2021 (SCN) to the Petitioner under Section 129(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) and the State Goods and Services Tax Act, 2017 (SGST Act) imposing penalty of Rs. 17,87,796/- on the Petitioner.

The Hon’ble Tripura High court held that the machinery should be released as the validity of the E-way bill expired on account of unforeseen and unexpected delay in crossing the check post since the transport department stopped the movement of the vehicle on the ground that the machinery was not registered in the State of Tripura and GST department imposed a fine of Rs.10,000/- which the Petitioner paid. This process, however, took more than 24 hours and in the meantime, the validity of the e-way bill expired. Though the Petitioner generated a new e-way bill, the GST department of the State was not prepared to accept it.

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