GST Update No 169 on release of conveyance if tax and penalty is paid

Powers related to detention and confiscation of vehicles and goods under GST regime must be exercised judiciously and appropriately. Post implementation of GST regime and introduction of concept of E-way bill, there had been various cases wherein vehicles carrying the goods are detained at behest of any sort of discrepancies in documents carried along with goods. On the same subject matter the issue came in front Gujarat High Court in the case of Sreejith K. V/s State of Gujarat wherein it was directed to release the conveyance since tax and penalty amount is already paid. The decision given is subject matter of our current update. The petitioner prayed for relief under Article 226 of Constitution of India and Writ of Mandamus to quash the detention order passed by revenue authorities. The petitioner is engaged in business of trading Areca Nuts and purchased the said commodity for Rs. 63,70,000/-. The tax invoice was raised by applicant in the name of “M/s Izaan Trading” having Invoice No. 11 and the goods pertaining to the same were loaded in conveyance. E-way bill was generated on 08.11.2021 which was valid up to 16.11.2021. Goods of Invoice 12 were uploaded in another conveyance. The goods in transit were intercepted at Surat and statement of driver was recorded. It was contended that no further proceedings should be initiated since tax and penalty amount is already paid. The Court held that the supplier has paid tax twice along with applicable penalty. Further, it was stated that the commodities which were being transported i.e. Areca Nuts were perishable in nature. Therefore, it was directed by the Court to the revenue authorities to release the conveyance at the earliest. The Court stated that if department wants to proceed further with inquiry, it may do so. The above decision is a favoring decision wherein the conveyance can be released if the tax and penalty amount is paid by the appellant. The above judgment is in alignment with the recent proposed changes which shall be effective from 01.02.2022 in CGST Act, 2017. The said amendment talks about proviso to Sub Section (3) of Section 129 of CGST Act, 2017 wherein it has been clarified that conveyance shall be released on payment if penalty as specified by the transported or Rs. 1,00,000 whichever is less. The anamoly of double tax payment has been amended by Government and now 200% penalty of tax amount is being levied in place 100% tax and equal penalty

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GST Update No 169 on release of conveyance if tax and penalty is paid

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