Section 129 of CGST Act, 2017—Goods in Transit—In the instant case, petitioner is a manufacturer of dried chick peas, gram flour, pulses and grams. They claim to purchase chick peas, dry them by heating them to a certain degree and the resultant product is known as "Dried Chick Peas". According to the petitioner, this would have to be classified only under Chapter 0713 of HSN. The petitioner had transported the dried chick peas from Salem to Dindigul. The petitioner had not filed any E-Way bill in view of the exemption statutorily granted.

While so, the consignment of the dried chick peas sent by the petitioner was intercepted by the fourth respondent on 21.12.2018. The fourth respondent seized the goods and also detained the vehicle in which the goods were being transported. The fourth respondent took the view that what was transported by the petitioner comes under the classification falling under Chapter 2106 of HSN.

Held that—In this view of the matter, he issued a detention notice and levied tax with equal penalty. The petitioner paid the said amount as demanded by the fourth respondent under protest and he also obtained release of the goods as well as the vehicle. The order was challenged in the writ petition principally on the ground that when a bonafide dispute as to classification had arisen, it is only the jurisdictional assessing officer, namely, the third respondent who could have ruled on the classification and that it was not open to the Squad Officer to have done so.

Classification of 'Dried Chick Peas', whether under Chapter 0713 and exempted or under Chapter 2106 and taxable. Squad officer can intercept the goods, detain them for the purpose of preparing the relevant papers for effective transmission to the jurisdictional assessing officer. However, it is not open to the squad officer to detain the goods beyond a reasonable period. Final call will have to be taken only by the jurisdictional assessing office. Commissioner of Commercial Taxes, Chennai directed to issue a circular to all the inspecting squad officers in Tamil Nadu not to detain goods or vehicles where there is a bonafide dispute as regards the exigibility of tax or rate of tax.

The circular shall embody the essence of the decision reported in (N.V.K. Mohammed Sulthan Rawther and Sons and Willson Vs. Union of India). Such a circular shall be issued within a period of eight weeks from the date of receipt of a copy of this order.  — Jeyyam Global Foods (P) Ltd. Vs. Union of India, Through Its Secretary (Revenue) , Ministry of Finance, And Others [2019] 8 TAXLOK.COM 045 (Madras)