Facts of the Case

The petitioner, Harish Ganapathi JS, sole proprietor of M/s. S M Drilling and Mining Services, Salem District, Tamil Nadu, challenged the detention of his vehicle bearing registration No. TN 28 FB 1614, along with its consigned equipment — a JCB NXT 21SLC excavator fitted with a CP550 compressor and a Velson V10 rig, together with spares including drill rods, drill bits and gear oil. The vehicle was intercepted by the respondents at Khammam, Telangana at 10:57 PM on 05.04.2022, and a detention order dated 06.04.2022 was passed in Form GST MOV-06 by the Deputy State Tax Officer. The petitioner sought a writ declaring the detention order illegal, arbitrary, without jurisdiction and violative of Articles 14 and 19(1)(g) of the Constitution, along with an interim direction for release of the vehicle and consignment pending the writ petition. On 12.04.2022 the Court had recorded the petitioner's submission that taxes had been paid on the machinery in Tamil Nadu and that the vehicle carried an e-Way Bill, while granting the respondents time to obtain instructions.

Issues Involved

  1. Whether the vehicle and consigned equipment detained under Form GST MOV-06 dated 06.04.2022 could be released pending adjudication of the penalty notice issued to the petitioner.

Petitioner's Arguments

  • All applicable taxes had been paid on the machinery, i.e., the JCB excavator and accessories, in Tamil Nadu, and the vehicle carried an e-Way Bill.
  • The petitioner had already responded to the notice issued by respondent no.1 but sought immediate release of the vehicle and consignment given the hardship of continued detention.

Respondent's Arguments

  • On instructions, the Standing Counsel submitted that on detention it was found the vehicle carried several e-Way Bills without any accompanying delivery challan.
  • Respondent no.1 had accordingly issued a notice for imposition of penalty, and instead of responding to that notice, the petitioner had approached the Court.

Court Order/Findings

  • The Court clarified that the scope of the writ petition was limited to the detention of the vehicle and consignment, and it was not deciding the correctness of the penalty notice or the underlying proceedings.
  • The vehicle and consignment were directed to be released on the petitioner furnishing (i) an undertaking not to alienate the consignment during pendency of proceedings before respondent no.1, and (ii) a bond of Rs.10 lakh with respondent no.1, both within seven days.
  • On compliance, respondent no.1 was directed to release the vehicle and consignment forthwith.
  • The Court made no observation on the notice issued by respondent no.1 or the contemplated penalty proceedings, which were left open.
  • The writ petition was disposed of without costs, and pending miscellaneous applications, if any, were closed.

Important Clarification

  • Even where several e-Way Bills without an accompanying delivery challan are alleged against a detained consignment, a writ court may grant interim release of the vehicle and goods pending penalty proceedings, conditional on an undertaking against alienation and a bond, without expressing any view on the merits of the penalty notice.

Sections Involved

  • Section 129, Central Goods and Services Tax Act, 2017 — detention, seizure and release of goods and conveyances in transit, and imposition of penalty for contravention.
  • Form GST MOV-06 — order of detention issued on interception of goods/conveyance.
  • Articles 14 and 19(1)(g), Constitution of India — invoked by the petitioner as grounds of challenge to the detention.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee. The Court did not quash the detention or the contemplated penalty proceedings, and expressly left the merits of the notice open; it granted only interim, conditional release of the vehicle and consignment against an undertaking and a Rs.10 lakh bond, both to be furnished within seven days.

Related Case Laws

No related case laws are available on this site at present.

Case Details

  • Court: High Court for the State of Telangana
  • Case No.: Writ Petition No. 18343 of 2022
  • Coram: Hon'ble Sri Justice Ujjal Bhuyan and Hon'ble Mrs Justice Surepalli Nanda
  • Order Date: 19.04.2022 (interim order dated 12.04.2022)

Link to Download the Order

Download the full judgment (PDF)

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