Detention of vehicle on the ground that transport receipt was a photocopy and the details filled in the transport receipt were handwritten was not held justifiable.

FS Enterprise v. State of Gujarat

High Court of Gujarat

R/Special Civil Application Nos. 7061 to 7064 of 2019

Section: 129 of CGST Act

Category: Detention of Goods

Date of Judgment: 11 October 2019

Relevant Sections: Section 129 of CGST/GGST Act, Rule 138A of CGST Rules, Circular No. 41/15/2018-GST, Circular No. 64/38/2018-GST

Facts of the Case

1. The petitioner, a registered GST dealer in Gujarat, transported TMT bars from Bhavnagar to Maharashtra on the order of Riya Enterprise, a registered dealer in Maharashtra. Proper invoice and e-way bills were generated before the commencement of movement (Para 2).
2. The truck was intercepted by the State Tax Officer who detained the goods under Section 129 of CGST Act citing the transport receipt was a photocopy and handwritten, lacking computerized details (Para 2.1).
3. Petitioner submitted that all mandatory documents — invoice and e-way bill — were in place and explained the transport receipt practice of using scanned copies via email/WhatsApp, which is common (Para 2.2).
4. Despite this, the truck was not released without payment of tax and penalty, prompting the petitioner to approach the High Court (Para 2.2).

Questions in Consideration

1. Whether goods can be detained under Section 129 of the CGST Act for the reason that the transport receipt is a photocopy and not computer-generated? (Para 6)
2. Whether a supplier must declare every commodity in the GST registration application to transport those goods? (Para 24)
3. Whether the tax authority can justify a detention order based on additional grounds not stated in the original order through affidavit in court? (Para 19)

Observations of the Court

1. Rule 138A of the CGST Rules requires the person in charge to carry invoice and e-way bill, both of which were in order and presented at the time of interception (Para 8).
2. No provision mandates production of a lorry receipt with computerised details. The Circular No. 41/15/2018-GST and instructions under Section 168 clearly state that, in absence of discrepancies in invoice and e-way bill, conveyance must be allowed to move (Paras 10, 17).
3. Circulars are binding on department officers and cannot be overruled by affidavit-based arguments or post-facto justifications (Paras 11, 13).
4. New grounds raised in affidavit — such as incorrect declaration of commodity in GST registration and contradictory driver statements — were not mentioned in original detention order and thus cannot be relied upon (Paras 18–22).
5. Column 18 of GST REG-01 requires only top five goods to be mentioned and there is no statutory bar against transporting other goods if properly invoiced and taxed (Para 24).
6. Amendment to registration regarding commodities is a non-core field under Rule 19 and does not require prior approval of GST officer (Para 27).

Judgment of the Court

The Gujarat High Court quashed the detention order and notices dated 2.4.2019 issued under Section 129 of the CGST Act, holding the detention of goods and truck illegal and without jurisdiction. The Court emphasized that all documents required under law were present, and technical issues like format of lorry receipt or commodity mismatch in registration were not valid grounds for detention. The petitions were allowed with no order as to costs (Para 30).

Between Fine Lines

• Transport receipts in handwritten or scanned form are not a valid reason for GST detention if e-way bill and invoice are proper.
• Commodity mismatch with GST registration is not illegal if tax invoice and rate are correctly declared.
• Officers must follow Board circulars; non-compliance invalidates detention.
• Reasons for detention cannot be supplemented later via affidavits.
• GST procedural lapses must be material and not trivial to justify penalties.

Summary of Referred Cases