Misclassification of goods cannot be a ground for detention of consignment u/s 129 of GST Act

Petitioner: Asahraf Ali K.H.

Respondents: Assistant Tax Officer, Assistant Commissioner & Joint Commissioner, Kerala GST Department

Authority: Kerala High Court

Date: 13th October, 2020

Case: The Respondents have detained a consignment of goods being transported on the ground that there was misclassification of the goods transported and issued notice to the Petitioner.

Core Issue: Whether misclassification of goods can be a ground for detention of consignment u/s 129?

Court’s Observation:

1. If there is a misclassification of goods, then the Respondents shall prepare a report on the basis of physical verification and get it signed by the Petitioner after recording his objections. Thereafter a copy of the report shall be sent to the Assessing Officer of the Petitioner to consider the report and the objections at the time of finalizing the assessment.

2. Detention of goods in transit is not justified.

Judgement:

1. Mis-classification of goods cannot warrant detention of goods u/s 129.

2. The Court quashed the notice and directed the respondents to release the goods and the vehicles after getting petitioner signature/objections recorded on the report prepared by the respondents.

3. The gist of the Order shall be communicated to the Respondents for expeditious clearance of the goods and the vehicle.