The Tax Publishers

GST--Release of goods

Taxpayer not Asking Provisional Release of Goods--No Penalty Imposable Under Section 129

CA. Satyadev Purohit

In the present write-up, the learned author attempts at making an analytical study of the issue as whether penalty under section 129 can be imposed where the taxpayer does not ask for provisional release of goods detained under section 129. The discussion is based on the relevant statutory provisions and the Allahabad High Court decision in the case of State of U.P. v. Maa Vindhyavasini Tobacco (P) Ltd., decided on 20-10-2022 : 2022 TaxPub(GST) 1665 (All-HC).

1. Introduction

Section 129 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with provisions relating to detention, seizure and release of goods and conveyance in transit.

As per sub-section (1) of section 129 of the CGST Act, notwithstanding anything contained in this Act, 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 the fifty per cent of the value of the goods or two hundred percent of the tax payable on such goods, whichever is higher, and in case of exempted goods,on payment of an amount equal to five percent 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;

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