Allows interim custody of seized motor-car transported without e-way bill by complying Section 129 and relevant rules: HC of Kerala

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Fact: M/s. KUN Motors, (“the first petitioner”), a company with a branch in Pondicherry, deals in luxury cars and Mr. Vishnu Mohan, (“the second petitioner”), a resident of Trivandrum, purchased a car—Mini Cooper S Hatch from KUN Motors on August 23, 2018, the Company raised the Exhibit P1 invoice and sold the vehicle to Mohan. Then Mohan had the vehicle temporarily registered in Pondicherry on August 27, 2018. Mohan wanted the car transported to Trivandrum, where he intends to use it. So, he requested the Company to transport the vehicle, so no Mohan’s request, the Company raised Exhibit P3 invoice, collected the transport charges, paid the IGST, and then dispatched the vehicle through its lorry to Trivandrum. But on August 28, 2018, the Assistant State Tax Officer, (“the first Respondent), intercepted the vehicle at Amaravila and detained it by invoking Section 129 of the KSGST Act, and demanded tax and penalty of Rs.33,59,056/-. The Company and Mohan replied to the statutory notice but their explanation was rejected. 

Held: The Hon’ble High Court of Kerala vide Order No. WP(C). No. 29019 of 2018 dated September 10, 2018 allows petitioner (motor-car dealer) to secure interim custody of goods (i.e. motor vehicle) transported from Puducherry to Kerala which was intercepted and detained for non-furnishing of e-way bill, following procedure prescribed u/s 129 of KGST Act, 2017, referring to Division Bench ruling in Indus Towers wherein it was held that if conditions under Act and Rules are not complied with, Section 129 operates and confiscation would be attracted, states that, this Court cannot take a different course from what has been judicially mandated for that case-holding is squarely binding; Accordingly holds that “petitioner can get the goods released by complying with section 129 and the relevant rules, and seek an early adjudication of the dispute”, while refraining to delve into merits and/or express any view on petitioner’s claims and contentions.