Section 129, 130 of the CGST Act, 2017 —Goods in Transit –-- The petitioner challenged detention of the goods under Section 129 of the Act, 2017 and prayed for release of the same. The petitioner submitted that their goods were detained on the pretext that the genuineness of the tendered documents need verification from regular bills of A/c. The petitioner on 11.09.2021 received a communication informing that inward supply to the sellers/suppliers of the petitioner is from the firm who is not having inward supply and is only engaged in outward supply without paying any tax. Thus, the petitioner is liable to be proceeded under Section 130(1) of the Act. The court observed that that the investigation report relied upon by the respondents to initiate proceedings lacks sting. The goods and conveyance in transit were accompanied with the documents as prescribed under Rule 138A and no discrepancy was pointed out in the said documents even in the reply filed by the respondents. There is no allegation that the petitioner has contravened any provision of the Act or the rules framed thereunder much less with an intent to evade payment of tax. The opinion of the authorities which forms basis of proceedings under Section 130 must have reasonable nexus with the action of the person against whom proceedings are being initiated. Such nexus must be manifest from the record and conveyed to the person.

Held that:- The Hon’ble High Court quashed the Notice and directed the Respondent No.4 to release conveyance and goods in question forthwith.