Daiwik Motors VS The Assisstant Tax Officer

goods upon furnishing a security equivalent to the tax and penalty determined in Ext.P7. The learned counsel for the petitioner submits that the vehicle and goods in question are perishable and, therefore, the petitioner should be permitted to sell them forthwith. I find that the detention is under the CGST Act and Rules and I am not inclined to release the goods unless the statutory requirements are complied with. It is also open for the petitioner to move the department for an early adjudication of the case. The writ petition is disposed of as above.

The petitioner has brought forth a case before the court in response to the issuance of Ext.P5 notice and Ext.P7 determination order under Section 129 of the Central Goods and Service Tax (CGST) Act. These documents pertain to the detention of goods and a vehicle belonging to the petitioner. The detention was based on the grounds that upon verification of accompanying documents, it was revealed that the consignor and consignee were different entities with distinct GISTINs. According to the authorities, the transaction in question was considered a stock transfer and was found to be non-compliant with the regulations stipulated under the CGST Act and Rules.

In response, the petitioner’s counsel argued that as per Rule 55 of the CG & ST Rules, an invoice need not be generated for transportation of goods unless it is by way of supply. However, the counsel failed to provide sufficient evidence to support the claim that the transportation in question was anything other than a supply transaction. The petitioner contended that since there was no transfer of ownership of the goods to the consignee, the transaction should not be deemed a sale. Nonetheless, the court noted that the definition of supply under Section 7 of the CGST Act extends beyond transactions of sale and encompasses transfers for various other purposes.

Consequently, the court ruled that the detention of the goods and vehicle was justified under the circumstances. However, it granted relief to the petitioner by allowing the release of the vehicle and goods upon furnishing a bank guarantee for the tax and penalty amount determined in the Ext.P7 order. Furthermore, the court ordered the 1st respondent to refer the matter for adjudication in accordance with the State Goods and Services Tax (SGST) Act and Rules. The petitioner was instructed to provide a copy of the writ petition along with a copy of the court’s judgment to the 1st respondent for further action.

The petitioner has brought their case before this Court due to grievances stemming from the issuance of Ext.P5 notice and Ext.P7 determination order under Section 129 of the Central Goods and Service Tax (CGST) Act. These actions resulted in the detention of goods and a vehicle belonging to the petitioner. The grounds for detention were based on a discrepancy found during the verification of accompanying documents, which revealed that the consignor and consignee were different entities with distinct GSTINs. The transaction in question was purportedly labeled as a stock transfer, but the documentation did not comply with the requirements outlined in the CGST Act and Rules.

The petitioner’s counsel argued that Rule 55 of the CG & ST Rules exempts the necessity of generating an invoice when goods are transported for reasons other than by way of supply. However, the counsel failed to provide a convincing argument as to why this specific transportation should be considered other than by way of supply. The petitioner contended that the transaction wasn’t a sale since there was no transfer of ownership of the goods to the consignee. Nevertheless, the Court observed that the definition of supply under Section 7 of the CGST Act encompasses transactions beyond sales, including transfers for other purposes. Thus, the detention of goods and the vehicle was deemed not unjustified.

However, the Court allowed the petitioner to obtain a release of the vehicle and goods from the 1st respondent upon furnishing a bank guarantee for the tax and penalty amount determined in Ext.P7 order. Following this, the 1st respondent was directed to refer the matter for adjudication in accordance with the SGST Act and Rules. The petitioner was instructed to present a copy of the writ petition along with a copy of the judgment to the 1st respondent for further action.

Additionally, various exhibits were presented during the proceedings, including delivery challans, e-way bills, letters of consent, inspection orders, detention orders, physical verification reports, and tax invoices, which were essential in understanding the intricacies of the case.

The petitioner has filed a case in response to the notice (Ext.P5) and determination order (Ext.P7) issued under Section 129 of the Central Goods and Service Tax (CGST) Act. This notice and order detained the goods and vehicle of the petitioner on the grounds that the documents accompanying the goods indicated that the consignor and consignee were different entities with different GSTINs, suggesting that the transaction was a stock transfer and not in accordance with CGST Act regulations.

The petitioner’s counsel argued that according to Rule 55 of the CGST Rules, an invoice is not required for transportation of goods if it’s not by way of supply. However, it was not clarified why this transportation should be considered other than a supply. The petitioner contended that the transaction wasn’t a sale as there was no transfer of ownership to the consignee. However, the definition of supply under Section 7 of the Act is broader than just sales and encompasses transfers for other purposes as well. Therefore, the detention was deemed justified.

Nevertheless, the petitioner was allowed to obtain release of the vehicle and goods by furnishing a bank guarantee for the determined tax and penalty amount as per Ext.P7. Subsequently, the matter was to be referred to adjudication under the SGST Act and Rules. The petitioner was directed to provide a copy of the writ petition along with the judgment to the respondent for further action.

Several documents (Exhibits P1 to P8) were presented as evidence, including delivery challans, e-way bills, letters, invoices, and verification reports, to support the petitioner’s case. Respondent exhibits were nil.

In conclusion, while the detention of goods and vehicle was found to be justified, the petitioner was granted the opportunity to secure release upon fulfilling certain conditions, and the matter was slated for further adjudication under the relevant statutes.

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