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Since there is no element of sale of goods or services in it, and mere transfer of goods inter-State would not attract the provisions of the Act because there is no taxable event in it, the detention of the goods and recovery of GST and penalty by respondent is unsustainable and illegal.

Section 129 of the CGST Act — Goods in Transit – The petitioner engaged in the business of manufacture and sales of tractors and their spares. The petitioner dispatched tractors to its Depot at Hyderabad under consignment dt.03-03-2020 and also issued e-way bill on the same day. The respondent detained the lorry on 05.03.2020 at 8.20 a.m. on the ground that there was mismatch between the goods in movement and documents tendered and that there is also mismatch between e-way bill and goods in movement. The respondent then issued a show cause notice dt.05.03.2000 under Section 129(3). The petitioner got the detained goods released on 05-03-2000 by paying tax and penalty. The petitioner submitted that there was only a stock transfer from its factory and there is no element of sale of goods or services in it, and mere transfer of goods inter-State would not attract the provisions of the Act because there is no taxable event in it. The respondent submitted that he was not aware that the petitioner had got depots at different places in the country. The court observed that the respondent could have verified this fact in GST portal of the Government of India. As regards the respondent’s submission that at the time of detention of the goods, the transporter/driver of vehicle did not tell them that they have an additional place of business, the court observed that no reasonable person when asked to pay GST and penalty of more than Rs.6 lakhs, would keep quiet and meekly pay up without bringing the said facts to the notice of the detaining authority. Held that:- The Hon’ble High Court allowed the writ Petition and directed the respondents to refund within four weeks the sum of Rs.6,70,448/- tax and penalty along with interest @ 9% p.a. from 05-03-2020 till date of payment to petitioner. The respondent shall also pay costs of Rs.1,500/-.