MS Steel and Pipes Vs ASTO Detention of Goods - Sec. 129 of CGST ACT

The Kerala High Court reviewed the legality of the detention of goods as per section 129 of the Central Goods and Services Tax (CGST) Act, 2017, in reference to the MS Steel and Pipes Vs ASTO - Detention of Goods case.

The provisions of Section 129 of the CGST Act, 2017 provide for the detention, seizure, and release of goods and conveyances in transit in certain circumstances. Under this provision, the proper officer may detain or seize such goods and the conveyance carrying them if he has the appropriate reasons to believe that any goods are being transported in violation of the CGST Act or the rules made thereunder. 

In the case of MS Steel and Pipes Vs ASTO, the petitioner, MS Steel and Pipes, had challenged the detention of their goods by the Assistant State Tax Officer (ASTO) under Section 129. The petitioner had contended the detention to be illegitimate as they believe that the ASTO had not followed the proper procedure under the CGST Act.

After the petition was submitted, the High Court then Later investigated the provisions of Section 129 of the CGST Act and held that the ASTO, if he had reasons to believe that they were being transported in violation of the Act, had the authority to detain the Goods. However, the High Court also held that the procedure prescribed under the Act must be followed for the detention of Goods under section 129 of the CGST Act.

The High Court further observed that there shall be reasonable grounds, which are to be recorded in writing, for ASTO to believe that the goods were being transported in violation of the provisions of the CGST Act. In addition, it was also held that if the proper officer does not initiate proceedings for confiscation of the goods, then the detained goods must be released within a period of fourteen days from the date of detention. 

Conclusion:

the Kerala High Court in Re MS Steel and Pipes Vs ASTO Detention of Goods - Sec. 129 held that the detention of goods under Section 129 is legal if it is carried out in accordance with the procedure prescribed under the Act and if the proper officer has reasonable grounds to believe that the goods are being transported in contravention of the Act.

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