Section 129 of CGST Act, 2017—Goods in Transit—In the instant case, the first petitioner described the commodity with "HSN 0802" in invoice, and paid the tax at 5%.
The ASTO detained the goods, alleging that the first petitioner's product fits the description "HSN 2106" and attracts 18% tax-not 5%. In other words, the ASTO detained the goods because the petitioners had allegedly been trying to evade tax by mis-describing the product.
Held that— The HC held that if the records he seizes truly reflect the transaction and the assessee's explanation accords with his past conduct, for example, the returns he has filed earlier, the detention is not the answer. At best the inspecting authority can alert the assessing authority to initiate the proceedings "for assessment of any alleged sale, at which the petitioner will have all his opportunities to put forward his pleas on law and on fact." The process of detention of the goods cannot be resorted to when the dispute is bona fide, especially, concerning the exigibility of tax and, more particularly, the rate of that tax.
The High Court while deciding as above relied on the case of J.K. Synthetics Limited Vs Commercial Tax Officer – (1994) 4 SCC 276 and Rams vs. Sales Tax Officer. The order of detention was held arbitrary and unsustainable, and was accordingly set aside.—N.V.K. Mohammed Sulthan Rawther And Sons And Willson Vs. UOI [2018] 5 TAXLOK.COM 021 (Ker)