Om Logistics Ltd Vs Deputy State Tax Officer (Madras High Court)
Madras High Court has ruled that the detention of a vehicle under Section 129 of the Central Goods and Services Tax (CGST) Act, 2017, is invalid when there is no actual movement of goods, even if an e-way bill with discrepancies is found. The court emphasized that the primary condition for invoking Section 129 is the “transportation of goods in contravention” of statutory provisions.
The case involved Om Logistics Ltd., which challenged an order dated April 1, 2025, issued by the Deputy State Tax Officer. The petitioner’s vehicle was intercepted on March 17, 2025, at Pallikonda Toll Gate by the State Tax Officer. During the inspection, two discrepancies were identified, leading to two separate penalties.
The first penalty, amounting to Rs. 1,10,592/-, was levied due to the undervaluation of certain goods being transported. The owner of these goods subsequently paid this penalty, leading to the release of the undervalued consignment. However, the vehicle itself remained under detention due to the second alleged contravention.
The second ground for penalty, amounting to Rs. 5,63,078/-, stemmed from the discovery that the vehicle’s driver was in possession of an invoice and an e-way bill whose contents did not match the intercepted vehicle. Specifically, while the petitioner’s vehicle bore the registration number HR-55-V6069, the e-way bill indicated a different vehicle number. The proper officer concluded that this invoice and e-way bill had been generated “without any movement of goods,” classifying it as an offense under the Act. Since the penalty for this second alleged contravention was not paid, the vehicle continued to be detained. Om Logistics Ltd. filed a miscellaneous petition seeking the vehicle’s release, pending the main writ petition.
