Ashutosh Kumar vs. The State Of Bihar

Held

The Court considered the provisions of Section 129(6) and its proviso. The petitioner claimed to be the owner-driver and disowned the goods being transported, which had already been put up for auction. Applying Section 129(6) and its proviso, the Court found that the petitioner was ready to deposit Rs. 1,00,000/- for the release of the vehicle. The Court directed the petitioner to deposit the sum of Rs. 1,00,000/- before the competent authority. Upon such deposit, Respondent No. 4, the Deputy Commissioner of State Taxes, Bihar Sharif, was ordered to release the vehicle after proper verification of ownership within 10 days from the date of deposit. The issue of the validity of the initial penalty of Rs. 3,48,91,251.00 was not explicitly decided, but the operative direction focused on the release of the vehicle based on the petitioner's willingness to pay Rs. 1,00,000/-.

Facts

The petitioner, Ashutosh Kumar, filed a writ application seeking the release of his vehicle, bearing registration number BR 21 GB 9550, which was detained under Section 68(3) of the Central Goods and Services Tax Act, 2017. The vehicle was intercepted on June 17, 2025, by officers of the Commercial Tax Department, Bihar Sharif Circle, carrying 348 boxes of cigarettes and 82 boxes of matchboxes. The driver produced an E-way Bill for the matchboxes but no documents for the cigarettes. The petitioner, claiming to be the owner-driver and illiterate, stated he was unaware of the E-way Bill requirement for cigarettes. A proceeding under Section 129 of the CGST Act was initiated, and a final order dated June 23, 2025, imposed a penalty of Rs. 3,48,91,251.00 under Section 129(3). The goods were subsequently auctioned.

Key Issues

1. Whether the detention of the vehicle and the imposition of penalty under Section 129(3) of the CGST Act, 2017, were justified given the petitioner's claim of being an illiterate owner-driver unaware of the documentation requirements for cigarettes. 2. Whether the petitioner, as the owner/driver of the vehicle, is entitled to the release of the vehicle upon payment of a lesser penalty as stipulated in the proviso to Section 129(6) of the CGST Act, 2017, considering the goods have been auctioned. Petitioner's Arguments: The petitioner argued that he was merely the owner/driver and had no connection with the goods being transported, which were loaded by a transport company. He contended that as per the proviso to Section 129(6), the conveyance can be released on payment of Rs. 1,00,000/- or a lesser amount, and he was willing to pay this sum for the vehicle's release. The petitioner also highlighted his illiteracy as a factor in his inability to produce the necessary documents. Revenue's Arguments: The State submitted that a show cause notice was served, but no one appeared on the date of hearing, nor was the ownership of the goods claimed. The firm purportedly owning the matchbox consignment was also found to be non-existent. The penalty was imposed based on the MRP printed on the goods.