Section 129 is a self-contained code. It lays down the entire mechanism for provisional release of the goods. Section 129 begins with a non-obstante clause. It stands protected from every other provision. Earlier this Court, on more than one occasion, has held that unfilled Part B of the e-way bill cannot be treated as a minor omission even as for the CBIC circular, dated 14th September 2018. Whatever is the defence the petitioner may have, that could not exonerate it from complying with Section 129 (3) if it wants provisional custody of the goods. In other words, under Section 129, if the petitioner wants the goods provisionally released, then it must comply the statutory mandate.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The petitioner is a transporter. When it was transported goods for a consignor, the Assistant State Tax Officer (“ASTO”) intercepted those goods and detained them, along with the vehicle. He issued the Ext.P4 order for physical verification/inspection of the conveyance, followed by the Ext.P7 notice under Section 129(3). The reason assigned for the detention is this:
“Part B of the accompanied e-way bill has not completed, hence not valid for the movement of goods as per Section 138 of the GST Act and Rules 2017.”
2. Later, the petitioner submitted the Ext.P8 explanation. But as the ASTO was not inclined to release the goods, the petitioner has filed this writ petition.
3. Earlier, this Court disposed of the matter reckoning that the petitioner and the respondent authorities have consensually agreed that the goods be released on the petitioner’s complying with Section 129(3) of the GST Act—by providing a bank guarantee. But Smt. Sujini, the petitioner’s counsel, mentioned the matter and submitted that the petitioner never consented. It wanted to have an order on merits. So I recall the judgment, dated 01.11.2018.
4. Sujini has submitted that the petitioner is only a transporter, and it receives paltry sums never exceeding 2,000/-rupees as transport charges. According to her, Section 129 in its entirety does not apply to the transporter; it may affect either the consignor or the consignee, at best. As the consignor and the consignee have insisted that the transporter has the obligation of reaching the goods to their destination, the petitioner has taken the trouble of coming to this Court, Smt. Sujini submits.
5. Drawing my attention to Section 129 (3) of the Act, Smt. Sujini contends that the provision does not refer to the transporter, who according to her, has no role to play in the entire scheme of the GST.
6. In the alternative, Smt. Sujini has submitted that the transaction is genuine and there is no possibility of, not even a doubt about, any tax evasion. In that context, Smt. Sujini has drawn my attention to Section 126 of the Act. According to her, Section 126 eminently exempts minor discrepancies. More particularly, when the discrepancy does not involve tax evasion, the detention under Section 129 is unwanted. Then, Smt. Sujini has referred to Section 74 of the Act and contended that the demand and recovery of tax must be based on fraud, willful misstatement, or suppression of facts. None presents itself here.
7. Finally, Smt. Sujini has taken me to Section 122 of the Act. She asserts that if somebody transports any taxable goods without the cover of documents, at best he can be mulcted with Rs.10,000/- as fine, and nothing more.
8. Thushara James, the learned Government Pleader, on the other hand, has submitted that Section 129 is a self-contained code. According to her, it is comprehensive; it lays down the entire mechanism for provisional release of the goods. When the Court queried about the interplay between Sections 126 and 129 of the Act, Dr.James has submitted that Section 129 begins with a non-obstante clause. It stands protected from every other provision. She has also pointed out that earlier this Court, on more than one occasion, has held that unfilled Part B of the e-way bill cannot be treated as a minor omission even as for the CBIC circular, dated 14th September 2018. She has, in the alternative, submitted that whatever is the defence the petitioner may have, that could not exonerate it from complying with Section 129 (3) if it wants provisional custody of the goods. In other words, under Section 129, if the petitioner wants the goods provisionally released, then it must comply the statutory mandate.
9. Heard Smt. Sujini, the learned counsel for the petitioner, Dr. Thushara James, the learned Government Pleader, for the respondents.
10. Indeed, as seen from the detention notice, the petitioner carried an e-way bill, in which Part B remained unfilled. True, on earlier occasions, this Court has examined the issue; one such occasion is Karunakaran v. The Assistant State Tax Officer.1
11. As rightly contended by Dr.James, Section 129 begins with a non-obstante clause and, perhaps, on that count it may be treated as a self-contained code on the provisional release of the goods. In this context, I may as well examine Section 126, which reads as follows:
“126. General disciplines related to penalty
(1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.
Explanation : For the purpose of this sub-section
(a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is less than five thousand rupees;
(b) an omission or mistake in documentation shall be considered to be easily rectifiable if the same is an error apparent on the face of the record
(2) The penalty imposed under this Act shall depend on the facts and circumstances of each case and shall be commensurate with the degree and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an opportunity of being heard.
(4) The officer under this Act shall while imposing penalty in an order for a breach of any law, regulation or procedural requirement, specify the nature of the breach and the applicable law, regulation or procedure under which the amount of penalty for the breach has been specified.
(5) When a person voluntarily discloses to an officer under this Act the circumstances of a breach of the tax law, regulation or procedural requirement prior to the discovery of the breach by the officer under this Act, the proper officer may consider this fact as a mitigating factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the penalty specified under this Act is either a fixed sum or expressed as a fixed percentage.”
12. I reckon the petitioner may not insist on the provisional release of the goods, but contest the matter before the State Tax Officer. It may then invite an order under Section 129 and 130. Then, Perhaps, every plea including those provided under Section 126 may be available. But if the petitioner desires to have the interim release of the goods, there is no escape from Section 129. As with Section 74, it is evident that the provision concerns the assessment but not transport and its interception, much less the detention and the provisional release. So goes the observation on Section 122 as well.
13. Indeed, the petitioner’s counsel has persistently pleaded that the petitioner is only a transporter. So the onerous Section 129 should not affect it. I am afraid the Act does not provide for any such exemption. In fact, Section 129(1)((b) applies to all other persons interested in the goods than the consignor. If the petitioner is interested, then it answers that description.
14. Under these circumstances, I hold that Exts.P5 to P7 notices of detention do not suffer from any legal infirmity. If the petitioner wants the interim custody of the goods, it may comply with the statutory mandate under Section 129(1)(b) and get them released. Of course, the petitioner’s compliance with Section 129(1) (b) does not affect its defence it may advance before the State Tax Officer when that authority determines the issue of detention.
Accordingly, the writ petition is dismissed. No order on costs.