Facts of the Case:
The petitioner is a registered taxpayer under CGST/SGST.
On 11.07.2025, he was transporting a consignment of scrap material from his registered premises to a purchaser in a vehicle (KL 35A 8148).
The vehicle was intercepted by GST Authorities at Angamaly.
At the time of interception, the vehicle was accompanied by a valid tax invoice and a duly generated E-way bill.
Dispute Raised by GST Authorities:
Authorities initiated proceedings under Section 129 of the CGST/SGST Act alleging that the goods were not covered by valid documents.
The core reason later provided (but not in the initial notices) was that the petitioner failed to produce the purchase document from an unregistered dealer.
Court's Observations & Findings:
The obligation under Rule 138A is only to carry:
Ext.P2 (MOV-01) clearly showed that both required documents were present at the time of interception.
The ground for detention (non-availability of purchase invoice from unregistered dealer) was not mentioned in any of the notices issued (MOV-01, MOV-02, MOV-06 or MOV-07).
The statement of the driver, alleging delayed E-way bill generation, was considered irrelevant as it was not part of any statutory document or notice.
Court's Decision:
Proceedings under Section 129 not legally sustainable as the vehicle was accompanied by the required documents under Rule 138A.
Notices issued were quashed.
Authorities were directed to release the vehicle and goods forthwith.
Right of the department to initiate separate proceedings (if legally sustainable) under other provisions remains intact.
GST Case Law Ajith Gopi versus State of Kerala
Citation-2025 TAXONATION 1964 (KERALA) (Click here to read full case law)
CA Naredra Gupta
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