Allahabad HC: Consignor/ Consignee is Deemed to Be Owner If Invoice is Included with Goods

The Allahabad High Court ruled that in cases where goods are accompanied by specified documents like invoices, either the consignee or consigner is considered the owner of the goods. Under Section 129(1)(a) of the Goods and Services Act, 2017, penalties, if applicable, should be charged.

A consignment was being transported for M/s Tata Steel Ltd. by the petitioner. The goods were taken from Odisha to Pilkhua but faced delays due to an engine breakdown in Jharkhand, and the E-Way Bills expired. While one E-Way Bill was extended, the GST portal didn’t permit extensions for the rest of the GST E-Way bills, which led to the goods being detained in Kanpur due to expired E-Way Bills.

The petitioner’s counsel argued that Section 129(1)(b) penalties couldn’t be imposed since the goods’ owner had reached out first before authorities did. They relied on Circular No. 76/50/2018-GST issued by the Central Board of Indirect Taxes and Customs, stating that only under Section 129(1)(a), penalties should be imposed, as long as invoices and E-Way Bills accompanied the goods, considering the consigner or consignee as the owner.

Even though the State raised a question concerning the availability of the remedy of appeal under Section 107 of the Act, it was undisputed that the goods were accompanied by the crucial documents.

Considering the arguments and the circular’s applicability, the bench, composed of Justices Ashwani Kumar Mishra and Syed Aftab Husain Rizvi, held that “since the department does not dispute the petitioner’s claim that the goods in transit had the required documents such as E-Way bill and invoice, the department should have considered releasing the goods and vehicle upon compliance with the provisions in Section 129(1)(a) of the Act.”

As a result, the writ petition was accepted.