Shree Govind Alloys PVT. LTD. vs. State Of Gujarat

Held

The Court held that the detention and seizure of goods and conveyance under Section 129(1) of the CGST Act, 2017, is not permissible solely on the ground of an expired e-Way bill, especially when no element of tax evasion with fraudulent intent or negligence is established. The Court referred to its own decision in Govind Tobacco Manufacturing Co. vs. State of U.P. and a Madhya Pradesh High Court judgment in M/s. Daya Shaker Singh vs State of Madhya Pradesh, which held that expiry of an e-Way bill during transit cannot be a ground for seizure. The Court found no fraudulent intention on the part of the petitioner in the present case. Consequently, the impugned order dated 04.11.2022 demanding tax and penalty, the order of detention dated 19.10.2022, and the notice issued under Section 129(3) dated 19.10.2022 were quashed and set aside.

Facts

The petitioner, Shree Govind Alloys Pvt. Ltd., along with Shree Ram Road Carriers (Petitioner No. 2), challenged an order dated 04.11.2022 demanding Rs. 7,53,364/- as tax and penalty under Section 129(3) of the CGST Act, 2017. The goods, valued at Rs. 24,69,358/-, and the truck were seized on 19.10.2022 because the e-Way bill had expired 41 hours prior to interception. The petitioner contended that the truck was non-motorable, causing the delay. The authorities detained the goods and conveyance, issuing GST Forms MOV No. 1, 2, 6, and 7, leading to the impugned order. The petitioner sought quashing of the detention order, notice, and the penalty demand, and release of the goods and vehicle.

Key Issues

1. Whether the detention and seizure of goods and conveyance under Section 129(1) of the CGST Act, 2017, is permissible solely on the ground of an expired e-Way bill, when no fraudulent intent or evasion of tax is established? Petitioner's Arguments: The petitioner argued that the expiry of the e-Way bill, especially when attributed to a non-motorable condition of the truck, should not be a sole basis for detention and seizure under Section 129 of the CGST Act. They relied on precedents where such detentions were held impermissible. They emphasized the lack of fraudulent intent or negligence on their part. Revenue's Arguments: The respondent State contended that the e-Way bill had expired 41 hours before interception, and the petitioner failed to provide a substantiated justification for the delay or the non-updation of the e-Way bill. They argued that the expiry of the e-Way bill was a contravention of the Act's provisions, justifying the detention.