CASE#35

Detention of goods on the ground of under valuation of

goods is not permissible

Section 129 of the Central Goods and Service Tax Act, 2017 & Rule
138 & Rule 139 of the Central Goods and Service Tax Rules, 2017
cumulatively talks about “Detention, seizure and release of goods and
conveyances in transit”.
In the case of K P Sugandh vs. STO (HC_Chhattisgarh) [16.03.2020:
WP 36 of 2020], it was held that the under valuation of goods in the
invoice could not be a ground for the detention of the goods and vehicle
u/s129 of the CGST Act. r/w Rule 138 of CGST Rules.
When the statutory scheme of the GST Act is such as to facilitate a free
movement of goods, after self-assessment by the petitioner, the
respondents cannot resort to an arbitrary and statutorily unwarranted
detention of goods during transportation.
Discrepancies in the valuation of the goods is not a ground, which
would be available for the Department for detaining and seizure of the
vehicle and goods.
CA Abhishek Agarwal, FCA, DISA E|abhishek@caasa.org M|9831982004

[For information purpose only]