Sunday, April 2, 2023

Impugned retention of the vehicle is clearly invalid: Madras High Court

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The Madras High Court while observing that no notice was ever provided, despite the fact that the seizure occurred as early as on 30.05.2022 and therefore the respondent’s act of detention of the Petitioner’s vehicle is the gross contravention of the statutory provisions directed the Deputy State Tax Officer , Chennai to release the conveyance in question along with the goods contained, forthwith.

The petitioner claimed to have purchased iron scrap from various dealers and states that it was in the process of transporting the same from Guwahati to Coimbatore. On 29.05.2020, the vehicle carrying the consignment, is stated to have suffered a mechanical difficulty as a result that the driver was forced to deviate from the planned route leading to the place of destination to identify a service shop for addressing the issue.

According to the petitioner, the vehicle had been stationed at the Veeraragavar service station that night. On 30.05.2022 at 12.30 a.m. the vehicle was intercepted at Sholavaram by the Deputy Tax Officer, Roving Squad, who upon a perusal of the documents that the driver was carrying arrived at the conclusion that the goods were being re-routed without proper e-way bill. The interception is justified by the respondent relying upon a statement of the driver that was adverse to the petitioner. However, and admittedly, a copy of the said statement has not been supplied to the petitioner.

A Single Bench of Dr. Justice Anita Sumanth observed that in law and on the clear language of Section 129 of the Central Goods and Services Tax Act, 2017 , the impugned retention of the vehicle is clearly invalid.

The provisions of Section 129 provide for the detention and seizure of the vehicle and contents upon condition that an order of detention/seizure shall be passed at the time of detention/seizure, and duly served upon the person transporting the goods.

In the present case, V.Prasanth Kiran , Counsel for the respondents on instructions, confirmed that no such order of detention has been issued and consequently the question of service upon the petitioner does not arise.

That apart, the provisions of Section 129 (3) require the proper officer detaining or seizing the goods to issue a notice specifying the penalty payable and thereafter pass an order within 7 days from the date of service of the notice in relation to the detention/seizure effected , held the bench.

The Bench further observed that in the present case, admittedly, no such notice has been issued till date though the seizure has been effected as early as on 30.05.2022. In the aforesaid circumstances, the act of the respondent in insisting that the petitioner retain the vehicle at the present location is in gross contravention of the statutory provisions.

Therefore the in view of the Court the petitioner thus succeeds and is entitled to the relief sought.

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