Provision of this section shall get attracted where any person transports any goods or stores any goods while goods are in transit in contravention of gst laws. All such goods and conveyance shall be liable to detention or seizure.

Section 129(1)

Notwithstanding anything contained in this Act,

where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder,

all such goods and conveyance and documents relating to such goods and conveyance shall be liable to detention or seizure

Section 129 comes into effect when a taxpayer transports any good or stores any good while they are in transit in contravention to the provision to this act or rules made there under.

Even procedure lapses not carrying all the documents or any other reason empowers the PO to detain the goods.

Goods must be in transit for applicability of section 129.

In case of conflict, this section overrides other provisions of the Act.

Para 2(g) of Circular No. 41/15/2018-GST dated 13/04/2018

Where PO is of the opinion that the goods and conveyance need to be detained u/s 129 of the CGST Act, he shall issue an order of detention in FORM GST MOV-06.

The said notice shall be served on the person in charge of the conveyance.

1^st Proviso to Section 129(1)

No such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

[1][Section 129(3)

PO detaining or seizing goods or conveyance shall issue a notice within 7 days of such detention or seizure, specifying the penalty payable

Para 2(g) of Circular No. 41/15/2018-GST dated 13/04/2018

PO shall issue notice in FORM GST MOV-07 specifying the tax and penalty payable. The said notice shall be served on the person in charge of the conveyance.

Rule 142(1)

PO shall serve, along with the notice issued u/s 129 a summary thereof electronically in FORM GST DRC-01

[2][Section 129(3)

PO shall pass an order within a period of 7 days from the date of service of notice in MOV-07, for payment of penalty u/c 1(a) or (b)]

Section 129(4)

[3][No penalty] shall be determined u/ss (3) without giving an opportunity of being heard.

Before determining penalty u/ss (3), the principal of natural justice has to be followed.

Rule 142(3)

where the person concerned makes payment of the amount referred in section 129(1) within ^[4][7 days of the notice issued u/s 129(3) but before the issuance of order under the said sub-section (3)],

he shall intimate PO of such payment in GST DRC-03 and the PO shall issue an order in GST DRC-05 concluding the proceedings in respect of the said notice.

[5][Section 129(1)(a)

After detention/ seizure goods and/ or conveyance shall be released on payment of following penalty

.

Para 2(h) of Circular No. 41/15/2018-GST dated 13/04/2018

Where the owner of the goods or any person authorized by him comes forward to make the payment of tax and penalty,

PO shall, after the amount of tax and penalty has been paid,

release the goods and conveyance by an order in FORM GST MOV-05.

Order in FORM GST MOV-09 shall be uploaded on the common portal and the demand accruing from the proceedings shall be added in the electronic liability register and the payment made shall be credited to such electronic liability register by debiting the electronic cash ledger or the electronic credit ledger of the concerned person in accordance with the provisions of section 49 of the CGST Act.

Circular No. 76/50/2018 GST dated 31.12.2018

Issue-6 : Who will be considered as the “owner of the goods‟ for the purposes of section 129(1)?

Clarification

It is hereby clarified that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner.

If the invoice or any other specified document is not accompanying the consignment of goods, then in such cases, the proper officer should determine who should be declared as the owner of the goods.

[6][Section 129(1)(b)

After detention/ seizure goods and/ or conveyance shall be released on payment of following penalty

.

Question & Answer

Section 129(1)(c)

The Goods and/ or conveyance after detention or seizure shall be released,

upon furnishing a security equivalent to the amount payable under clause (a) or (b) above in such form and manner as may be prescribed:

Para 2(i) of Circular No. 41/15/2018-GST dated 13/04/2018

Where the owner of the goods, or the person authorized by him comes forward to get the goods and the conveyance released by furnishing a security u/s 129(1((c), the goods and the conveyance shall be released, by an order in FORM GST MOV-05, after obtaining a bond in FORM GST MOV-08 along with a security in the form of bank guarantee.

The finalisation of the proceedings u/s 129 of the CGST Act shall be taken up on priority by the officer concerned and the security provided may be adjusted against the demand arising from such proceedings.

Para 2(j) of Circular No. 41/15/2018-GST dated 13/04/2018

Where any objections are filed against the proposed amount of tax and penalty payable, PO shall consider such objections and thereafter, pass a speaking order in FORM GST MOV-09, quantifying the tax and penalty payable. On payment of such tax and penalty, the goods and conveyance shall be released forthwith by an order in FORM GST MOV-05.

The order in FORM GST MOV09 shall be uploaded on the common portal and the demand accruing from the order shall be added in the electronic liability register and, upon payment of the demand, such register shall be credited by either debiting the electronic cash ledger or the electronic credit ledger.

Section 129(5)

On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.

[7][Section 129(6)

Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty u/ss (1) within 15 days from the date of receipt of the copy of the order passed u/ss (3),

the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty.

1^st Proviso to Section 129(6)

Conveyance shall be released on payment by the transporter 

penalty u/ss (3) or

Rs. 1 lac,

whichever is less:

2^nd Proviso to Section 129(6)

where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said 15 days may be reduced by the proper officer

Circular No. 64/38/2018 - GST dated 14-09-2018

Issue

Various representations have been received regarding imposition of penalty in case of minor discrepancies in the details mentioned in the e-way bill although there are no major lapses in the invoices accompanying the goods in movement.

3

If person does not carry mentioned documents, then section 129 & 130 is invocable

In case such person does not carry the mentioned documents, there is no doubt that a contravention of the provisions of the law takes place and the provisions of section 129 and section 130 of the CGST Act are invocable.

Further, non-furnishing of information in Part B of FORM GST EWB-01 amounts to the e-way bill becoming not a valid document for the movement of goods by road as per Explanation (2) to rule 138(3) of the CGST Rules.

4.

Proceedings u/s 129 may be initiated, if consignment of goods is not accompanied by e-way bill

It has been informed that proceedings u/s 129 are being initiated for every mistake in the documents mentioned in para 3 above.

It is clarified that in case a consignment of goods is accompanied by an invoice or any other specified document and not an e-way bill, proceedings under section 129 of the CGST Act may be initiated.

5.

Proceedings u/s 129 may not be initiated u/s 129 in following situtations

If consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings u/s 129 may not be initiated in the following situations:

a) Spelling mistakes in the name of consignor or consignee but the GSTIN is correct;

b) Error in the pin-code but the address of consignor and consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill;

c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;

d) Error in one or two digits of the document number mentioned in the e-way bill;

e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;

f) Error in one or two digits/characters of the vehicle number.

6.

Levy of penalty in case of Para-5

In case of the above situations, penalty to the tune of Rs. 100/- each u/s 125 in GST DRC-07 for every consignment.

A record of all such consignments where proceedings u/s 129 have not been invoked in view of the situations listed in paragraph 5 above shall be sent by the proper officer to his controlling officer on a weekly basis.

Penalty Justified for contravention of carrying the goods without valid documents

Hon’ble Karnataka High Court - Order dated 03.07.2014 [State of Karnataka v RCI Logistics (P) Ltd reported as 2015 (1) TMI 899.]

Assessing Authority was fully justified in imposing the penalty for contravention of carrying the goods without valid documents

Merely non mentioning of Vehicle No on e-way bill can not be ground for seizure

All the documents were accompanied the goods, details are duly mentioned which reflects from the perusal of the documents. Merely of non-mentioning of the vehicle no. in part –B cannot be a ground for seizure of the goods. The High Court held that seizure order did not suction and directed to release the goods with vehicles. Non mentioning of vehicle number

Hon’ble High Court of Allahabad while deciding the  writ filed by the petitioner held as above in its order sated 13.01.20128 in the case of In VSL Alloys (India) Pvt Ltd. State of U.P And another reported as 2018 (5) TMI 455.

The goods cannot be detained merely on the basis of procedural lapses

(a) ABCO Trades (p) v the Assistant State Tax Officer [2020-VIL-399-KER dated 21.08.2020]

Issue –Validity of detention of goods for the e-way bill shows consignee as an unregistered person whereas the invoice mention of the consignee’s GSTIN nd also that the mention of the tax applicable in the delivery challan when the goods are stock transferred.

Held – The mere mention of the consignee as unregistered person in the e-way bill cannot be of any significance when the invoice that accompanied the transportation clearly referred to the GSTIN of the consignee. Secondly, mention of the tax applicable in the delivery challan was by mistake for it is evident it is evident that when the goods stock transferred and not sold, there need not be a payment of tax at all. The reasons for detaining the consignment are not sufficient to attract the provisions of Section 129 of the reasons for detention in the instant case cannot be seen as justified. Thus, the writ petition is allowed by directing the respondent to immediately release the goods and the vehicle covered by detention notice.

(b) Krishna Kumar, proprietor M/s Vishnu Gen power v the Asst. State Tax Officer [2020-VIL-39-KER., dated 19.08.2020]

Issue –Detention of consignment for non –mention of the IGST payable in the e-way bill accompanying transportation of the goods.

Held –As per Rule 138A of the IGST Rule there is no requirement of mentioning the GST applicable in the e-way bill and hence, the authorities are not justified in detaining the consignment. The detention notices are quashed, and the respondent is directed to release the goods and the vehicle

Undervaluation of invoice cannot be a ground for detention of goods

M/s K.P. Sugandh Ltd v State of Chhattisgarh [2020-VIL-142-Chg, dated 16.03.2020]

In the case, it has been held by the Hon’ble High Court that undervaluation of goods in the invoice cannot be a ground for detention of goods and vehicles. Accordingly, proceeding cannot be initiated against the assesse under Section 129 of the CGST Act,1017 read with Rule 138 of the CGST Rule, 2017.

[8][Section 129(2) [Deleted wef 21-12-2021]

The provisions of section 67(6) shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

Question & Answer