Facts of the Case

The petitioner, Sri Madhagoni Venkaiah, is the owner of a lorry bearing registration No. TS05 UC 2257. The vehicle was seized by the first respondent on 03.11.2024 at Vijayawada while transporting 21,625 kgs of iron and steel scrap, along with the E-way bill handed over to the driver by the consignor, the sixth respondent. The consignment was to be delivered from Vijayawada to Hyderabad, Telangana. Aggrieved by the seizure, the petitioner filed a writ petition under Article 226 seeking a writ of Mandamus setting aside the order of detention issued in FORM GST MOV-06 dated 03.11.2024, together with exemplary costs of Rs. 1 lakh against the second respondent.

Issues Involved

  1. Whether the vehicle was liable to be released for want of notices within the timelines prescribed under Section 129 of the CGST Act, 2017.
  2. Whether Section 129 could be invoked where the goods were accompanied by a valid E-way bill and physical inspection matched the declared description and quantity.
  3. Whether disputed questions of fact as to service of notices and the origin of the goods could be adjudicated in writ proceedings.

Petitioner’s Arguments

  • Section 129 of the CGST Act, 2017 requires the seizing authority to furnish reasons and issue a show cause notice within seven days of seizure, and to pass an order within a further seven days. No notices having been issued, the petitioner was entitled to release of the vehicle.
  • The power under Section 129 is available only if the jurisdictional facts are made out, namely that transport of the goods is in contravention of the Act or Rules.
  • It was an admitted fact that the goods were accompanied by an E-way bill generated on the GST portal, and physical inspection showed the description and quantity matched. In such circumstances Section 129 could not be invoked at all.

Respondent’s Arguments

  • The driver was served with the detention order on the date of detention and subsequently with a show cause notice under Section 129; proceedings could not be completed due to non-cooperation of the petitioner.
  • An E-way bill was generated for movement from Hyderabad to Vijayawada at 9.16 P.M. on 02.11.2024, and another showing movement from Vijayawada to Hyderabad at 9.18 P.M. the same day. The goods could not have moved in two minutes, disclosing a prima facie case of circular trading to evade tax.
  • The consignor’s address contained no godown capable of storing the quantity of scrap in question.

Court Order / Findings

  • The Division Bench found clear disputes of fact — the petitioner contending no notices were issued, the respondent contending they were issued strictly within Section 129 — and a further dispute as to where the goods were loaded.
  • The Court held that these questions of fact cannot be gone into in these proceedings.
  • Keeping in view the timelines under Section 129, the writ petition was disposed of directing the first respondent to complete the Section 129 proceedings expeditiously and preferably within two weeks.
  • The petitioner or his authorised representative was directed to appear on 26.12.2024 at 11.00 A.M. and put forth his entire case, and the first respondent was to decide after considering the written objections and oral submissions.

Important Clarification

  • Where the parties are at issue on whether Section 129 notices were served, and on the origin and movement of the goods, these are disputed questions of fact not amenable to writ jurisdiction.
  • A matching E-way bill does not by itself conclude the enquiry where the department alleges circular trading based on the sequence of E-way bill generation.
  • The appropriate course is time-bound completion of the Section 129 proceedings with full opportunity to the person concerned, rather than release of the vehicle by the writ court.

Sections Involved

  • Section 129 of the Central Goods and Services Tax Act, 2017 – Detention, seizure and release of goods and conveyances in transit
  • FORM GST MOV-06 – Order of detention
  • Article 226 of the Constitution of India – Writ jurisdiction

Decision – In Favour of

The writ petition was disposed of with directions. The petitioner did not obtain release of the vehicle and the Court declined to decide the factual disputes, but a time-bound direction was issued requiring the department to complete Section 129 proceedings within two weeks after hearing him — in substance, procedural relief to the assessee with the merits left to the department.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: W.P. No. 29363 of 2024  |  CNR: APHC010558882024
  • Coram: Hon’ble Sri Justice R. Raghunandan Rao and Hon’ble Sri Justice Maheswara Rao Kuncheam
  • Date of Order: 24 December 2024  |  Disposal: Disposed of, no costs

Link to Download the Order

Click here to download the full order – Madhagoni Venkaiah vs Deputy Assistant Commissioner (State Tax) & Ors. (W.P. No. 29363 of 2024)