IMPORTANT POINT
The court established that proper documentation allows the owner of goods to be treated under Section 129(1)(a) of the CGST Act for release, overriding penalties under (1)(b).

JUDGMENT :

The present writ petition, filed under Article 226 of the Constitution of India, assails the actions of the respondents authorities with regard to detention of the goods and vehicle of the petitioner as well as subsequent orders passed under Section 129 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ''CGST Act'').

2. At the outset, we may state that the counsel on behalf of the petitioner has submitted that he is restricting the prayers made in the writ petition to the proceeding initiated under Section 129 of the CGST Act.

3. The main issue in this writ petition is whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act.

4. The main contention of the learned counsel for the petitioner is that the petitioner is the owner of the goods and, therefore, goods are to be released as per Section 129(1)(a) of CGST Act while the authorities have made the calculation under Section 129(1)(b) of the CGST Act by an order dated October 19, 2023.

5. Before proceeding, one may record the brief facts of the case. The petitioner received an order for supply of Dried Arecanuts from M/s Komolika Trading Co., New Delhi. Subsequently, the goods were loaded on the vehicle and sent alongwith invoice and E-way bill. When the goods were on its way from Calcutta to New Delhi, the same were intercepted in the State of U.P. on October 3, 2023. The relevant facts are that upon physical verification being made, it was found that there was no discrepancy in relation to the consignment and the goods were as per the invoice and E-way bill. However, it appears that goods have been detained on October 11, 2023 on the ground that both the consignor and consignee were declared as non-existent. It is to be noted that on the date of interception that is October 3, 2023, the petitioner was having a registration under the CGST Act. The said registration was subsequently suspended on October 06, 2023 by the authorities at West Bengal with effect from September 18, 2023. Upon the detention being made, the petitioner being the owner of the goods came forward and sought for release of the goods under Section 129(1)(a) of the CGST Act. However, the authorities have determined the penalty to be paid as per Section 129(1)(b) of the CGST Act.

6. Counsel for the petitioner submits that as per the Circular No. 76/50/2018-GST dated 31st December 2018, it has been clarified by the Central Board of Indirect Taxes and Customs, GST Policy Wing that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner. If the invoice or any other specified document is not accompanying the consignment of goods, then in such cases, the proper officer should determine who should be declared as the owner of the goods. The relevant clause is provided below:

7. Counsel for the petitioner further relies upon two Coordinate Bench judgments to buttress his arguments that the penalty to be imposed when the owner comes up before the authority is to be calculated under Section 129(1)(a) and not under Section 129(1)(b) of the CGST Act.

8. Counsel for the respondent authorities has supported the actions of the authorities and stated that the actions taken by the authorities were correct in law, as the buyer and seller were not having CGST registration.

9. Upon perusal of the record and after hearing learned counsel for the petitioner, we would first like to place on record the judgment passed by Division Bench of this Court in M/s Sahil Traders v. State of U.P. and another, 2023:/AHC:116953-DB (Coram: Hon'ble Saumitra Dayal Singh, J. and Hon'ble Rajendra Kumar-IV, J.), wherein it has been categorically held that Circular dated December 31, 2018 is applicable and when the tax invoice and the E-way bill are produced by the assessee, the goods shall be treated as belonging to the assessee, who comes before the authorities a