Order date: 20 October 2022

Fact:

• The Respondent’s, M/s Maa Vindhyavasini Tobacco Pvt Ltd, goods being transported were intercepted on 28.04.2019 at about 21:31 hours on the intelligence received to the petitioners that the goods were being transported on the basis of tax invoices which were pre used.
• After the interception, the statement of the truck driver was recorded, based upon the said statement the authorities proceeded to pass an order under Section 129(3) of the CGST Act after serving the copy of the notice to the respondent.
• The respondents were directed to pay the tax on the goods being transported amounting to Rs.7,23,700/- and a further cess of Rs.19,05,024/-.
• The said order was challenged by the respondents by preferring an appeal.

Issue:

• Whether the demand of tax and penalty imposed vide order dated 17.05.2019 under Section 129(3) of the CGST Act was set aside.

Order:

• The Court observed that the appellate authority by means of the impugned order held that there was no material available with the authorities concerned for detention and seizure of the goods, for passing the orders under Section 129 (3) of the CGST Act. While deciding the appeal, the appellate authority after referring to the provisions of Section 129 held that it is well settled that the levy of tax and penalty cannot be based upon the presumption.
• Further, section 129 deals with the provisions for release of goods intercepted during transportation on the ground as engrafted therein and provides an opportunity to the assessee to take the benefit and to come forward for the release of the goods on payment of the amounts as indicated in Section 129 (1)(a)(b) and (c) as the case may be.
• The authority observed that if the assessee does not avail the benefit as accrued from Section 129, the department is clearly free to take recourse under Chapter 15 read with Section 122 of the CGST Act to take steps for determining the tax due liability, and the penalty.
• The authorities stated that the respondent has not approached for availing the benefit that flows from Section 129 coupled with the fact that the appellate authority found that the basis for initiating proceedings were non-existent. However, the Court did not see any reason to interfere with the order passed by the appellate authority, in the exercise of powers under Section 226 of the Constitution of India.
• The writ petition is dismissed.