GST Detention Without Jurisdiction Quashed: Procedural Lapses Cannot Justify Seizure

The petitioner, Panchhi Traders, was engaged in the business of trading goods and had transported consignments accompanied by tax invoices and e-way bills. During transit, the goods were intercepted by the GST authorities and detained under Section 129 of the Gujarat Goods and Services Tax Act, 2017. The detaining authority alleged discrepancies and proceeded to issue notices demanding tax and penalty.

The petitioner challenged the detention and consequential proceedings, contending that all statutory documents were valid and that the detention was arbitrary and without jurisdiction.

Issue Before HC: Whether detention of goods and conveyance under Section 129 of the GST Act was valid when statutory documents were in order and no deliberate contravention was established.

HC’s Decision: The High Court held that the detention of goods was unsustainable in law. It observed that mere technical or procedural discrepancies, without any intention to evade tax, do not justify invoking Section 129 of the GST Act. The Court emphasized that the power of detention cannot be exercised mechanically and must be supported by tangible material indicating tax evasion.

Since the goods were accompanied by valid documents and no substantive violation was demonstrated, the impugned detention orders were quashed. The respondents were directed to release the goods and conveyance forthwith without insisting on payment of tax or penalty.

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