The Calcutta High Court directed the Goods and Services Tax (GST) department to release vehicle  and held that department cannot seize goods under section 129 of GST Act, 2017 when quantity or weight of goods is found correct on physical verification. Ashok Sharma , the assessee has challenged the show-cause notice, the unsigned summary of show-cause notices and the order of demand for tax and penalty, in GST Form MOV-09.

The assessee had filed a writ petition challenging the show cause notice and the order which was dismissed. Are You Ready for GST Disputes? Master the Litigation Maze! The bench was asked to determine whether the items that were detained while being transported in a vehicle under the guise of three invoices differed from the items that were discovered in the vehicle during the inspection process. According to the bench, the authority has not been able to prove with certainty that the assessee intended to avoid paying taxes. Read More: Assessee’s Income should be Chargeable under Head “Income from Other Sources” for Depreciation Claims: ITAT The Department does not argue that the HSN classifications of items are identical.

The judgment further stated that it is not the case that proceedings under Section 129 of the Act could have been drawn, resulting in the items being detained and a penalty being levied.  Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya’s Division Bench stated that the department’s physical inspection of the weight and quantity of the commodities transported in the vehicle revealed no discrepancies. Are You Ready for GST Disputes? Master the Litigation Maze! “The inspecting authority appears to have made a roving inquiry and went beyond the description of the goods as described in three invoices and has recorded information regarding the size of the pipe, shutter, and TMT Bar which detail was not mentioned in the invoices,” the bench added.

As a result, the case’s facts and circumstances do not raise the issue of applying Section 129 of the Act. Section 129 of CGST Act, 2017 deals with the detention, seizure, and release of goods and vehicles in transit. If goods are transported without proper documentation or in violation of the law, they can be detained or seized. Are You Ready for GST Disputes? Master the Litigation Maze! In light of observation, the bench directed the department to release the vehicle along with the goods within four days from the order.