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The Calcutta High Court has held that adjudication on ownership of goods is of no relevance in a case where the petition was filed for release of detained consignment in terms of Section 129 of the CGST Act, 2017. The Department had disputed ownership, quality and quantity of the subject goods and objected the authenticity and veracity of tax invoices and e-way bills.
On meaningful and harmonious reading of Section 129, the Court held that the legislative intent was not to create any charge or lien over the goods against the demand. It was observed that if during adjudication of demand it is found that the assessee is not the owner of the goods or the challenge fails, the ultimate demand will stand and will be crystallized.
The High Court here in Ranjeet Kumar Poddar v. Assistant Commissioner also observed that if the levy is not paid, which is otherwise crystalized and determined by the Department in accordance with law, then the recovery proceeding is prescribed under the statute.
Directing release of the consignment according to Section 129(1)(a), the Court also noted that no contrary material was produced in the SCN or in the order of demand, and that the goods were perishable in nature. Section 129 provides different levels of penalty for owners and others.
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