Court orders release of goods detained for minor e-way bill discrepancy on furnishing indemnity bond.

Case Name:

Court No. - 29 Case: WRIT TAX No. 1406 of 2018 Petitioner: M/S Diamond Metal Respondent: State Of U.P. And 2 Others Judges: Hon’ble Pankaj Mithal, J. and Hon’ble Ashok Kumar, J. Order Date: 30th October 2018

Key Takeaways:

- The court recognized that the detention was due to a minor discrepancy in the vehicle number on the e-way bill. - The court relied on the Government of India's circular dated 14.09.2018, which stated that minor discrepancies like errors in one or two digits/characters of the vehicle number should not lead to proceedings under the Act. - The court ordered the release of the goods and vehicle upon the petitioner furnishing an indemnity bond equivalent to the tax and penalty liability mentioned in the notice under Section 129(3) of the Act. **Issue:** The central issue was whether the detention of the petitioner's goods (aluminum scrap) under Section 129(1) of the UPGST Act was justified when the sole reason was a minor discrepancy in the vehicle number mentioned on the e-way bill. **Facts:** - The petitioner, a registered dealer, was transporting aluminum scrap from Kanpur to Jaunpur. - The goods were intercepted and detained under Section 129(1) of the UPGST Act solely because the vehicle number did not tally with the number mentioned on the e-way bill. - The petitioner had paid the requisite tax, as per the invoice. **Arguments:** - The petitioner's counsel, Sri Aditya Pandey, argued that the detention was unjustified as it was due to a minor discrepancy in the vehicle number on the e-way bill. - The petitioner's counsel relied on the Government of India's circular dated 14.09.2018, which stated that minor discrepancies like errors in one or two digits/characters of the vehicle number should not lead to proceedings under the Act. **Key Legal Precedents:** - The court relied on the Government of India's circular dated 14.09.2018, issued by the Ministry of Finance, Department of Revenue Central Board of Direct Taxes and Customs GST Policies Wing, which modified the earlier circular dated 13.04.2018. **Judgement:** The court disposed of the writ petition with the direction to the respondents (authorities) to release the goods and the vehicle of the petitioner forthwith upon the petitioner furnishing an indemnity bond equivalent to the amount of tax and penalty liability mentioned in the notice under Section 129(3) of the Act. **FAQs:** 1. **What was the reason for the detention of the petitioner's goods?** The petitioner's goods (aluminum scrap) were detained under Section 129(1) of the UPGST Act solely because the vehicle number did not tally with the number mentioned on the e-way bill. 2. **What was the court's decision in this case?** The court disposed of the writ petition and directed the authorities to release the goods and vehicle forthwith upon the petitioner furnishing an indemnity bond equivalent to the tax and penalty liability mentioned in the notice under Section 129(3) of the Act. 3. **What legal precedent did the court rely on?** The court relied on the Government of India's circular dated 14.09.2018, issued by the Ministry of Finance, Department of Revenue Central Board of Direct Taxes and Customs GST Policies Wing, which stated that minor discrepancies like errors in one or two digits/characters of the vehicle number should not lead to proceedings under the Act. 4. **What was the significance of the petitioner being a registered dealer?** The fact that the petitioner was a registered dealer and had paid the requisite tax, as per the invoice, supported their case that the detention was unjustified and was solely due to a minor discrepancy in the vehicle number on the e-way bill. 5. **What is an indemnity bond, and why was the petitioner required to furnish one?** An indemnity bond is a legal instrument that provides a guarantee or security against potential losses or liabilities. In this case, the petitioner was required to furnish an indemnity bond equivalent to the tax and penalty liability mentioned in the notice under Section 129(3) of the Act as a condition for the release of their goods and vehicle.

Heard Sri Aditya Pandey, learned counsel for the petitioner and learned Standing Counsel on behalf of the respondents.

The Aluminium scrap of the petitioner transported from Kanpur to Jaunpur has been intercepted and detained under Section 129(1) of the U.P. GST Act, only for the reason that the vehicle number do not tally with the vehicle number mentioned on the E-way bill. Petitioner is a registered dealer and as per the invoice requisite tax has been realized.

In context with the detention of goods on account of some minor discrepancy the circular of the Government of India, Ministry of Finance, Department of Revenue Central Board of Direct Taxes and Custom GST Policies Wing dated 14.09.2018, which modifies the earlier circular dated 13.04.2018 clearly stipulates that in case of minor discrepancies in the details mentioned in the E-way bill, specially errors of one or two digits/character of the vehicle number would not be sufficient for initiation of any proceedings under the Act.

In view of the above, we dispose of the writ petition with the direction to the respondents to release the goods and the vehicle of the petitioner forthwith on the petitioner's furnishing indemnity bond of the amount equivalent to the liability of tax and penalty as mentioned in the notice under Section 129(3) of the Act.

The writ petition is disposed of.

Order Date :- 30.10.2018

SK Srivastava

(Ashok Kumar,J.) (Pankaj Mithal,J.)