Section 129 of the CGST Act, 2017 — Goods in Transit —SCN for demanding tax to be issued under Section 73/74 of the Act-- The petitioner challenged the order dated 17.10.2018, passed under Section 129 of the Act as well as the order dated 31.10.2020 passed by the Appellate Authority, whereby the appeal preferred by the petitioner has been dismissed. The petitioner submitted that after detention of goods, SCN under Section 129 of the Act and order were issued to the petitioner. The counsel for the petitioner submitted that the SCN be dropped on the ground that the tax was duly paid as was required under the Act and the Part-B of the e-way bill was also uploaded prior to the passing of the detention order. No proceedings for determination of the penalty or for determination of the tax outstanding have been initiated either under Section 73 or 74 or under section 122 of the Act. In terms of section 129, the proper officer is neither authorized nor justified in determining the tax or imposing the penalty as has been done by means of the impugned orders. The court observed that Section 129, can be invoked with regard to the goods in transit and the goods can be released only in the event the owner of the goods comes forward for payment of penalty as specified in clause (a) or (b) or (c) of Section 129 (1) of the Act and if the owner of the goods or the person does not volunteer to pay the penalty, then the department is will equipped to initiate proceedings by taking recourse to Section 73, 74, 75 of the Act read with section 122 for determination of tax and the penalty. In this case, the department has proceeded to determine the tax liability as well as penalty only under the provisions of Section 129 , which is not contemplated or intended. There is no provision under section 129 for determination of tax due, which can be done only by taking recourse to the provisions of Section 73 or 74 . The order passed on 17.10.2018 and as upheld by the order dated 31.10.2020 are not legally substitutable.

Held that:- The Hon’ble High Court set aside the impugned orders and directed that the amount paid by the petitioner for release of the goods shall be refunded to the petitioner, within a period of two months.