The Allahabad High Court ruled that if goods come with invoices or other specified documents, either the receiver or the sender will be considered the owner of the goods. Any penalties should be imposed under Section 129(1)(a) of the Goods and Services Tax Act, 2017, if applicable.

The petitioner was responsible for transporting a consignment on behalf of M/s Tata Steel Ltd. from Odisha to Pilkhua. Unfortunately, during the journey in the state of Jharkhand, the vehicle broke down, causing a delay in the delivery of the goods. Consequently, the E-Way Bills associated with the shipment expired. The petitioner managed to extend one of the E-Way Bills but encountered difficulties when trying to extend the others through the GST portal. Subsequently, the goods were detained in Kanpur on the grounds that the E-Way Bills had expired.

The petitioner's counsel argued that any penalty, if applicable, should not be imposed under Section 129(1)(b) of the Act because the owner of the goods had already come forward before the authorities. Additionally, reference was made to Circular No. 76/50/2018-GST dated 31.12.2018 issued by the Central Board of Indirect Taxes and Customs. According to this circular, the penalty could only be imposed under Section 129(1)(a) of the Act. This is because the invoice and E-way Bills were accompanying the goods, and either the consigner or the consignee should be considered the deemed owner of the goods, as per the argument presented.

While the State raised an objection based on the availability of the remedy of appeal under Section 107 of the Act, it was not contested that the goods were indeed accompanied by the necessary documents.

Considering the arguments presented by both parties and taking into account the applicability of the circular, the bench composed of Justices Ashwani Kumar Mishra and Syed Aftab Husain Rizvi made a ruling.

They stated, “In view of the fact that the department does not dispute the petitioner's assertion that the goods in transit were carrying necessary documents in the form of E-Way bill and invoice, etc., we are of the view that the department ought to have considered the petitioner's prayer for the release of goods and vehicle upon compliance of the provisions contained U/s 129 (1) (a) of the Act.”

 In accordance with their assessment and consideration of the arguments and the circular, the bench allowed the writ petition.

Case: Western Carrier India Ltd v. State of U.P. And 4 Others, Writ Tax No. - 1020 of 2023.