M/S.Lodha Roadways vs Deputy State Tax Officer on 24 April, 2023

Summary of Judgment: M/S.Lodha Roadways vs Deputy State Tax Officer

1. Outcome

The Writ Petition filed by the transporter was dismissed. The court found no merit in the petitioner's request to quash the detention and penalty orders.

2. Core Issue

Whether a transporter, under Section 129 of the GST Act, has the right to seek the release of detained goods, or if their remedy is statutorily limited to seeking the release of the conveyance only.

3. Key Facts

• The petitioner, M/s. Lodha Roadways, is a transporter whose conveyance and the goods it was carrying were intercepted and detained by the State Tax Officer.
• The authorities issued an order of detention (Form GST MOV-06), a penalty notice (Form GST MOV-07), and a final demand for tax and penalty (Form GST MOV-09).
• The transporter filed a writ petition challenging these orders and seeking the release of the detained items.

4. Arguments

• Petitioner's (Transporter's) Argument:

  • The petitioner sought to quash the entire proceedings, including the detention order and the demand for tax and penalty.
  • They argued for the release of the conveyance on the ground that the tax had already been paid in full (presumably by the owner of the goods).
  • They relied on the precedent set in Thiruannamalaiyar Transport V. The Deputy State Tax Officer.

• Respondent's (Revenue's) Argument:

  • The Revenue's position, as reflected in the Court's reasoning, is that the transporter's rights under Section 129 are limited. Specifically, the proviso to Section 129(6) only permits a transporter to seek the release of the conveyance, not the goods.

5. Court’s Reasoning

The High Court held that the petition was misconceived and dismissed it based on the following reasoning:

• Distinct Roles under Section 129: The Court emphasized that the GST law consciously distinguishes between the roles and rights of the "owner of the goods" and the "transporter".
• Transporter's Limited Remedy: The Court interpreted the first proviso to Section 129(6) as providing a specific and limited remedy exclusively for the transporter. This remedy allows the transporter to secure the release of the conveyance only, upon payment of the penalty under sub-section (3) or Rs. 1 lakh, whichever is less.
• "Person Transporting Goods" Interpreted: The Court clarified that the phrase "person transporting any goods" used in Section 129(1) and (6) refers to the owner of the goods or their agent who contracted for the supply, not the entity merely providing the carriage service (the transporter).
• No Right to Contest on Behalf of Owner: The transporter has no statutory right to seek the release of the detained goods; this right is vested only with the owner of the goods. The court noted that the transporter's argument about tax payment was not maintainable, as the tax would have been borne by the assessee (owner), who was not a party before the court.
• Precedent Distinguished: The Court distinguished the Thiruannamalaiyar Transport case, stating that the specific legal distinction between a transporter's rights and an owner's rights under Section 129 had not been argued or considered in that judgment, making it inapplicable.

6. Statutory References

• Constitution of India: Article 226
• Central/Tamil Nadu Goods and Services Tax Act, 2017: Section 129 (Detention, seizure and release of goods and conveyances in transit), particularly sub-sections (1) and (6) and its provisos.

7. Precedents Cited

• TCI Freight Vs. The Assistant Commissioner and another (W.P.No.18753 of 2022): Heavily relied upon by the Court, this precedent established the core reasoning that a transporter's remedy under Section 129 is limited to the release of the conveyance only.
• Thiruannamalaiyar Transport V. The Deputy State Tax Officer and another (W.P.No.32960 of 2022): Cited by the petitioner but was distinguished and not followed by the Court.