Important points
The supply of the new vehicle by its authorised dealer terminated on it being purchased by the 2nd appellant in Puthuchery and the subsequent movement of the goods was not occasioned by reason of the transaction of supply- The goods having come into the possession of the purchaser, and the vehicle having been used, however negligible the distance run, we are also of the opinion that it is his "used personal effect" and there can be alleged no taxable transaction in so far as the movement of goods from Puthuchery to Trivandrum in Kerala, especially since the car had been registered in the name of the purchaser.

VINOD CHANDRAN, J.

1. The issue arises as to whether the omission to upload e-way bill with respect to the transport of a car purchased in Puthuchery, by a person normally residing in Thiruvananthapuram, attracts Section 129 of the Kerala State Goods and Services Tax Act, 2017 (KSG&ST Act for brevity). The impugned judgment found that there should be an adjudication carried on and refused release of the vehicle. In appeal, at the admission stage, we prima facie found that there is no requirement for detaining the vehicle for reason of there being no mandate to upload an e-way bill when the transport is of used personal effects coming within the description of “used personal and household effects” as found in the Annexure, exempted by sub-rule (14) of Rule 138 of the Kerala Goods and Services Tax Rules, 2017 (KG&ST Rules hereafter); which a used car would be. The State at that stage sought for time to file a counter affidavit since the dismissal of the writ petition was at the admission stage itself.

2. A counter affidavit has been filed and we have heard Sri. Harishankar V Menon on behalf of the appellants and Sri C. E. Unnikrishnan, the learned Special Government Pleader (Taxes) on behalf of the State.

3. On facts it has to be noticed that the 1st appellant is a dealer in motor vehicles and the 2nd appellant purchased a Mini-Cooper car from the 1st appellant. A temporary registration in the name of the 2nd appellant was also taken from Puthuchery Motor Vehicles Department as also an insurance cover obtained. The 2nd appellant then, could have driven the vehicle to Thiruvananthapuram where he normally resides. However, the purchase being made of a fancy car at a fancy price he felt that he should not subject the car to a long journey from Puthuchery to Thiruvananthapuram. He hence entrusted the same to the dealer itself for transportation. Here, we have to notice that the dealer has a transportation and logistic wing which is also registered under the GST enactment. The goods were transported in a specially equipped carriage by road. The invoice of purchase of car showed collection of IGST, obviously deeming the sale to be an inter-state one. An invoice is issued for the transporting charges, which too shows collection of IGST, being the tax for service of transportation of the vehicle. The vehicle in which the car was carried was detained at Amaravila, within the State of Kerala.

4. A notice was issued as seen from Ext.P4(b) which contained three grounds, one of which was, of no e-way bill having been uploaded. The other grounds were of registration in Puthuchery being suspicious and the compensation cess having been collected at a lesser rate; which grounds were given up when Ext.P4(a) order of detention was issued; referring only to failure to upload the e-way bill.

5. The appellants are respectvely the dealer-transporter and the purchaser-owner of the vehicle. Both were issued with the notices and the order of detention and hence were before this Court seeking release of the vehicle. The primary contention was that the car was purchased by the 2nd appellant from the 1st appellant, delivery effected and a temporary registration taken out. The car then becomes the personal effect of the former, who transported it to his normal place of residence. There was hence no requirement for uploading e-way bill under Rule 138 for reason of the exemption granted under Sub-rule (14) of Rule 138 read with the Annexure. It was also argued that the 2nd appellant if had driven the vehicle from Puthuchery to Thiruvananthapuram there would have been no such detention or demand for tax. The demand raised as per the notice issued and the order passed was the applicable tax and penalty at 100% of the tax applicable, being the IGST which the dealer had already collected as evidenced from the invoice produced at Ext.P1.

6. The learned Single Judge rightly found Section 129 to be the mechanism for detention, seizure and release of goods and con