Quick Summary
The law governing the detention and release of goods in transit under Section 129 of the CGST Act has increasingly become one of the most sensitive and commercially significant areas in GST litigation. What was originally introduced as a mechanism to discourage tax evasion has, in several cases, gra
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
Buy CCI PRO Now
Already a PRO member? Login here for an ad-free experience.
Section 129 of the CGST Act was introduced as a mechanism to discourage tax evasion by providing for the detention and release of goods in transit.
Section 129(1)(a) applies when the owner comes forward for penalty payment (200% of tax payable). Section 129(1)(b) applies when the owner does not come forward, imposing a harsher penalty (50% of goods' value or 200% of tax payable, whichever is higher).
No, the law and recent judgments suggest that mere suspicion or allegations regarding ownership, without substantive supporting material, cannot justify prolonged detention of goods.
The Ranjeet Kumar Poddar case provides judicial clarification that GST detention powers under Section 129 require evidence beyond mere suspicion, emphasizing proportionality and the need to protect lawful business activity.
The judgment recognizes that prolonged detention of perishable goods can be disproportionately punitive, as their commercial value can deteriorate significantly during the delay, and emphasizes the need for timely release.
No, the judgment clarifies that detention powers are distinct from adjudication and recovery mechanisms. Detention cannot be used as a parallel mechanism to secure recovery before a tax liability is conclusively determined.
CAclubindia
