Facts of the Case

The Petitioner, Sri Madhagoni Venkaiah, owner of a lorry bearing registration No. TS05 UC 2257, had his vehicle seized on 03.11.2024 by the Deputy Assistant Commissioner (State Tax), Patamata Circle, Vijayawada-III Division, while it was transporting 21,625 kgs of iron and steel scrap. The consignment, consigned by M/s Rigel Enterprises (Respondent No. 6), was accompanied by an E-way bill generated under the GST portal and handed over to the driver. The detaining authority issued an order of detention in FORM GST MOV-06 dated 03.11.2024. Aggrieved by the seizure, the Petitioner approached the High Court under Article 226, seeking to set aside the detention order and additionally praying for an exemplary cost of Rs. 1 lakh against the officer who ordered the detention (Respondent No. 2). An accompanying interlocutory application sought suspension of the detention order pending disposal of the writ petition.

Issues Involved

  1. Whether the detaining authority had complied with the statutory timelines under Section 129 of the GST Act — furnishing reasons for seizure and issuing a show cause notice within 7 days, followed by a final order within a further 7 days.
  2. Whether the power of seizure/detention under Section 129 could be exercised at all, given that the goods were accompanied by a genuine E-way bill and the physical inspection matched the description and quantity of goods declared.
  3. Whether disputed questions of fact — including whether notices were actually issued, and the true origin of the loaded goods — could be adjudicated by the High Court in writ proceedings.

Petitioner's Arguments

  • Learned counsel for the Petitioner contended that Section 129 of the Goods and Services Tax Act, 2017 obliges the seizing authority to furnish reasons for detention and issue a show cause notice within 7 days of seizure, and thereafter pass a final order within a further 7 days; since no such notices had been issued in this case, the Petitioner was entitled to release of the vehicle without further proceedings.
  • It was further argued that the power under Section 129 is available only where the transport of goods is shown to be in contravention of the Act or Rules; here, the iron and steel scrap was accompanied by a valid E-way bill generated by the consignor, and a physical inspection confirmed that the description and quantity of the goods matched the particulars in the E-way bill — so the seizure itself was without jurisdiction.
  • It was also submitted that the scrap had actually been loaded at Autonagar, Vijayawada, and not at the consignor's registered address as alleged by the Department.

Respondent's Arguments

  • The Deputy Assistant Commissioner (State Tax), in a counter affidavit, contended that the driver of the vehicle was served with the detention order on the very date of detention, and was subsequently served with a show cause notice under Section 129; the proceedings could not be completed only because of the Petitioner's non-cooperation.
  • On the substance of the alleged infraction, the Department pointed to two E-way bills: one showing movement of the goods from Hyderabad to Vijayawada generated at 9:16 PM on 02.11.2024, and a second, generated by the consignor (Respondent No. 6), showing movement of the same goods from Vijayawada back to Hyderabad barely two minutes later, at 9:18 PM the same day.
  • The learned Assistant Government Pleader for Commercial Tax argued that the goods could not physically have been moved and then moved back within two minutes, pointing to a prima facie case of circular trading and movement of goods to evade tax, further noting that the consignor's declared address had no godown capable of storing 21,625 kgs of scrap.

Court Order / Findings

  • The Division Bench (R. Raghunandan Rao, J. and Maheswara Rao Kuncheam, J.) found that the case involved clear disputes of fact — including whether notices and proceedings under Section 129 had in fact been issued, and whether the goods had originated from Autonagar or from the consignor's registered address — which could not be resolved by the Court in writ proceedings.
  • Keeping in view the statutory timelines under Section 129, the Court disposed of the writ petition with a direction to the Deputy Assistant Commissioner (State Tax) to complete the Section 129 proceedings expeditiously, and preferably within two weeks.
  • The Petitioner or an authorised representative was directed to appear before the detaining authority on 26.12.2024 at 11:00 AM to place the Petitioner's case in full; the authority was thereafter directed to decide the matter within the same two-week window, after considering the Petitioner's written and oral submissions.

Important Clarification

  • The Court did not rule on whether the E-way bill discrepancy actually amounted to circular trading or tax evasion, nor did it decide whether the detention itself was validly effected within the statutory timelines. Both questions were left for the departmental authority to determine on merits, after hearing the Petitioner, within the time-bound framework fixed by the Court.
  • The case underscores that even where a consignment carries a facially valid E-way bill matching the goods on physical inspection, a closely-timed second E-way bill purporting to reverse the movement of the same goods can trigger a genuine Section 129 inquiry into circular trading — a factual dispute that writ courts will generally decline to resolve themselves, instead compelling a time-bound departmental adjudication.

Sections Involved

  • Section 129 of the Goods and Services Tax Act, 2017 — governs detention, seizure and release of goods and conveyances in transit in contravention of the Act or Rules, including the timelines for notice and final order.
  • Article 226 of the Constitution of India, 1950 — invoked for the writ remedy before the High Court.
  • Section 151 of the Code of Civil Procedure, 1908 — invoked for the interlocutory application seeking suspension of the detention order.

Decision – In Favour of

Disposed of with directions and no finding on merits. The Court neither ordered release of the vehicle nor upheld the detention, but directed the GST Department to complete the Section 129 proceedings — after affording the Petitioner a hearing — within two weeks.

Related Case Laws

No directly on-point case notes on Section 129 vehicle/goods detention are currently published on this site.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WP No. 29363 of 2024 and IA No. 1 of 2024
  • CNR: APHC010558882024
  • Coram: Justice R. Raghunandan Rao and Justice Maheswara Rao Kuncheam
  • Decision Date: 24-12-2024

Link to Download the Order

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