Detention/seizure for dispute in classification of Goods – Whether Justified?

Keval Sonecha – [2021] 132 taxmann.com 65 (Article)

Section 129 of CGST Act, 2017 read with Rule 138 to Rule 138E of CGST Rules, 2017 mandates the requirement of generating and keeping e-way bills and invoice in the course of goods-in-transit. At times, there may be bona-fide dispute regarding the classification of goods or valuation of goods while issuing invoice. There are plethoras of judgments wherein the authorities have held that, whenever there is bona-fide dispute regarding classification or valuation of Goods, the same cannot be assessed within the Powers assigned to Officer under section 129 of CGST Act, 2017.

However, no proper clarification or circular is being issued by the department to streamline or reduce the litigation. In this article, the author has analysed Section 129 and various decisions wherein various courts have issued direction to issue circular with regards to the procedure followed by the officer during the course of verification of Goods-in-transit.

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