Halder Enterprises Vs State of Uttar Pradesh and Others (Allahabad High Court)
The Allahabad High Court recently addressed a writ petition challenging the detention of goods and the vehicle of the petitioner under the Central Goods and Services Tax (CGST) Act, 2017. The main issue in the case was whether the goods should be released under Section 129(1)(a) or 129(1)(b) of the CGST Act. The petitioner, who was the owner of the goods, sought release under Section 129(1)(a), which involves payment of tax and penalty by the owner, while the authorities calculated the penalty under Section 129(1)(b), which applies when the owner does not come forward. The petitioner’s goods, which included Dried Arecanuts, were intercepted in Uttar Pradesh while en route from Calcutta to New Delhi. Despite the goods matching the invoice and E-way bill, they were detained because both the consignor and consignee were listed as non-existent in the records, though the petitioner had a valid CGST registration that was later suspended.
The petitioner argued that under the Central Board of Indirect Taxes and Customs (CBIC) Circular dated December 31, 2018, if an invoice and E-way bill are accompanying the goods, either the consignor or consignee should be deemed the owner. Since these documents were in place, the petitioner contended that they should be considered the owner and entitled to release the goods under Section 129(1)(a). The court agreed, citing two previous judgments in which it was ruled that when the proper documentation is produced, the owner of the goods, as determined by the documents, should be entitled to the lesser penalty and release under Section 129(1)(a). The High Court quashed the authorities’ October 19, 2023 order, directing them to re-assess the case in line with Section 129(1)(a) within three weeks.
