The Tax Publishers

GST--Detention of Goods

Can Tax Liability be Determined in a Proceeding Under Section 129

Prayag Narain 

The learned author seeks to analyse the issue as to whether tax liability can be determined in the proceeding under section 129 of the Central Goods and Services Tax Act, 2017. The related issue is being discussed in the light of the statutory provisions and a recent Allahabad High Court in the case of Bharti Airtel Ltd. v. State of UP, decided on 19-10-2022 : 2022 TaxPub(GST) 1651 (All-HC).

1. Scope and objective of section 129

Section 129 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with detention, seizure and release of goods and conveyance in transit. Sub-section (1) of section 129 of the CGST Act, 2017 provides that where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, --

(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;

(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed.

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