Name

Address
Email
Mob
Date

To,
Name of the Authority
Designation
Office Address

Subject: Reply to Notice Issued Under Section 129(3) of the CGST Act

Reference: Notice No. Notice Number, dated Date of Notice

Dear Sir/Madam,

I, …….., am writing this letter in response to the notice issued under Section 129(3)
of the Central Goods and Services Tax (CGST) Act concerning the detention of the
vehicle carrying consignment Details of Consignment due to the absence of a valid
eway bill.
I wish to bring to your kind attention the following facts and submissions for your
consideration:
1. Absence of Intent to Evade Tax:
As per Section 130 of the CGST Act, the intent to evade payment of tax is a
mandatory requirement to be read in conjunction with Section 129.
In this instance, there was no intent on our part to evade the payment of tax. The
consignment was accompanied by all relevant documents, except for the eway bill,
which was inadvertently omitted due to a bona fide oversight.

2. Procedural Lapse:
 The omission of the eway bill was a procedural lapse rather than an attempt to
evade tax. It was an unintentional error that occurred despite our best efforts to
comply with all regulations.
The goods in question were properly invoiced, and all tax liabilities were duly
accounted for, as evidenced by the accompanying tax invoice.

Having considered the matter, the i wishes to confine its consideration only to the
quantum of penalty, as was made clear vide order dated 20th May, 2024. It is not in
doubt that stricto sensu, the appellant cannot shirk from its responsibility of
complying with the requirement in law to generate a fresh Eway bill, if for any
reason the consignment had not been transported. However, viewing the factual
scenario, which is not disputed, i.e., the appellant is the owner of the consignment
and was using it in connection with its contractual obligations in Uttar Pradesh and
then having a similar contract in West Bengal and no evidence has been placed on
record that shows that the consignment was to be sold/used for any other purpose
in respect of any other party, this Court is persuaded to interference. 18. The
appellant has been saddled with the tax amount of ₹48,97,419/ (Rupees forty eight
lakh ninety seven thousand four hundred nineteen ). The law also provides for
imposition of penalty. Ordinarily, this may have refrained from interfering, but
because there was an Eway bill that was generated and in 10 view of the discussions
made hereinabove, we are inclined to vary the orders passed by the High Court. 19.
The end of justice would be served if the penalty amount is removed . Therefore, the
penalty imposed, is revoked, and the fine imposed on the basis of due course of law,
which shall be paid by the appellant.
Upon the same being done, the transportation vehicle as also the consignment shall
be released to their rightful owners expeditiously. At the same time, the appellant is
cautioned to be vigilant in future.
Consider the aforeelucidated terms.

Request for Reconsideration:

In light of the above submissions, we respectfully request your good office to
reconsider the initiation of proceedings under Section 129 of the CGST Act.
We kindly urge you to withdraw the notice issued under Section 129(3) and
consider applying Section 122 for the procedural lapse in the absence of an eway bill.

We assure you of our commitment to full compliance with all statutory requirements
going forward and are willing to rectify any lapses and pay any applicable penalties
under Section 122 of the CGST Act.
Thank you for your attention to this matter.

Yours sincerely,

(GSTN)

Enclosures:
1. Copy of the Notice under Section 129(3) of the CGST Act
2. Tax Invoice of the Consignment
3. Any other relevant documents

Having considered the matter, the i wishes to confine its consideration only to the
quantum of penalty, as was made clear vide order dated 20th May, 2024. It is not in
doubt that stricto sensu, the appellant cannot shirk from its responsibility of
complying with the requirement in law to generate a fresh Eway bill, if for any
reason the consignment had not been transported. However, viewing the factual
scenario, which is not disputed, i.e., the appellant is the owner of the consignment
and was using it in connection with its contractual obligations in Uttar Pradesh and
then having a similar contract in West Bengal and no evidence has been placed on
record that shows that the consignment was to be sold/used for any other purpose
in respect of any other party, this Court is persuaded to interference. 18. The
appellant has been saddled with the tax amount of ₹48,97,419/ (Rupees forty eight
lakh ninety seven thousand four hundred nineteen ). The law also provides for
imposition of penalty. Ordinarily, this may have refrained from interfering, but
because there was an Eway bill that was generated and in 10 view of the discussions
made hereinabove, we are inclined to vary the orders passed by the High Court. 19.
The end of justice would be served if the penalty amount is removed . Therefore, the
penalty imposed, is revoked, and the fine imposed on the basis of due course of law,
which shall be paid by the appellant.
Upon the same being done, the transportation vehicle as also the consignment shall
be released to their rightful owners expeditiously. At the same time, the appellant is
cautioned to be vigilant in future.
Consider the aforeelucidated terms.

To,

The Assistant Commissioner,

Name/Adress of the GST Department,

Subject: Reply to Notice Issued Under Section 129(3) of the CGST Act

Reference: Notice No. Notice Number dated Date of Notice

Respected Sir/Madam,

I, Your Name, authorized representative of Name of Your Company/Business,

located at Address of Your Company/Business, hereby submit this detailed reply to
the notice issued under Section 129(3) of the Central Goods and Services Tax (CGST)
Act, 2017, concerning the detention of the vehicle bearing registration number
Vehicle Registration Number carrying the consignment covered under Invoice No.
Invoice Number dated Date of Invoice.

1. Background of the Case

The vehicle in question was transporting goods from Origin to Destination in

compliance with our contractual obligations. An Eway bill bearing number Eway
Bill Number was duly generated for the consignment. Unfortunately, due to
unforeseen circumstances, the consignment could not be transported within the
validity period of the original Eway bill. The consignment details are as follows:

Invoice Number: Invoice Number

Date of Invoice: Date of Invoice
Consignment Description: Description of Goods
Quantity: Quantity
Value: Value

We acknowledge our responsibility to comply with the requirements of the law,

which mandates the generation of a fresh Eway bill if the consignment is not
transported within the validity period of the original Eway bill. However, it is
pertinent to mention the following factual aspects which are not in dispute:
appellant is the owner of the consignment, and the goods were being used in
connection with contractual obligations in Uttar Pradesh and then for a similar
contract in West Bengal.
There is no evidence on record indicating that the consignment was intended for sale
or use for any other purpose or party.
Section 129 of the CGST Act pertains to the detention, seizure, and release of goods
and conveyances in transit. It mandates the imposition of tax and penalty in cases
where goods are transported without valid documents, indicating an intent to evade
tax. However, the legal provisions under Section 130 of the CGST Act, which address
the confiscation of goods or conveyances and levy of penalty, explicitly require the
demonstration of an intent to evade payment of tax.

In the present case:

Lack of Intent to Evade Tax: There has been no observation or evidence from the
authorities indicating any intent on our part to evade payment of tax.

Procedural Lapses: The lapse in generating a fresh Eway bill was purely procedural
and not an attempt to evade taxes.

4. Analysis of Legal Provisions

4.1 Applicability of Section 129

Section 129 of the CGST Act provides for the detention, seizure, and release of goods
and conveyances in transit in cases where the goods are transported without valid
documents. The primary intent of this provision is to curb tax evasion. However, in
our case, the following points are noteworthy:

Eway Bill Generated: An Eway bill was initially generated, evidencing our intent to
comply with legal requirements.
No Intent to Evade Tax: There is no record or indication of any intent to evade tax
on our part.

4.2 Applicability of Section 130

Section 130 deals with the confiscation of goods or conveyances and levy of
penalties. This section specifically requires the demonstration of an intent to evade
tax. Given that no such intent has been observed or evidenced, the application of this
section is not justified in our case.

4.3 Appropriate Section: Section 122

Section 122 of the CGST Act pertains to penalties for certain offences, including
procedural lapses. Given the nature of our case, where the lapse was procedural
without any intent to evade tax, the appropriate section for consideration would be
Section 122.

5. Precedents and Judicial Interpretations

There have been several judicial pronouncements underscoring the necessity to

prove intent to evade tax for the imposition of penalties under Sections 129 and 130.
The Hon'ble Courts have consistently held that mere procedural lapses, in the
absence of any fraudulent intent or tax evasion, should not attract the stringent
provisions of Section 129.

Case Reference:
XYZ Pvt. Ltd. vs. State of State: The court ruled that the absence of intent to evade
tax and the existence of a valid Eway bill at the outset mitigated the severity of the
procedural lapse, thus warranting leniency under Section 122.

6. Request for Revocation of Penalty

Given the factual and legal context, we respectfully request:

Revocation of Penalty: The penalty imposed under Section 129 be revoked as it is

not applicable in the present scenario where there is no intent to evade tax.
 Release of Goods and Vehicle: Upon payment of the applicable tax amount, the
transportation vehicle and the consignment should be released to their rightful
owners expeditiously.

7. Commitment to Compliance

We assure the authorities of our commitment to comply with all legal requirements
diligently. We have taken necessary steps to ensure such procedural lapses do not
occur in the future and to remain vigilant in our operations. Our compliance
measures include:

Training and Awareness: Conducting regular training sessions for our logistics and
compliance teams to ensure they are aware of and adhere to all regulatory
requirements.
Enhanced Monitoring: Implementing a robust monitoring system to track the
validity of Eway bills and ensure timely renewal if required.
Internal Audits: Conducting periodic internal audits to identify and rectify any
compliance gaps proactively.

8. Conclusion

In conclusion, we humbly request the withdrawal of proceedings under Section 129

of the CGST Act and consider this case under the appropriate section, taking into
account the absence of any intent to evade tax. We believe that addressing this
matter under Section 122 would be more just and equitable.

We look forward to a favorable response and are available for any further
clarifications or documentation that may be required.

Thank you for your understanding and cooperation.

Yours faithfully,
Your Name

Your Designation

Your Contact Information

Email Address

Company/Business Name

Company/Business Address

Enclosures:

1. Copy of Notice issued under Section 129(3)

2. Copy of the Eway bill
3. Copy of the Invoice
4. Any other relevant documents

CC:

Name of Your Legal Counsel, if any

Other Relevant Parties, if any

Attachments:

Attachment 1: Copy of Notice

Attachment 2: Copy of Eway Bill
Attachment 3: Copy of Invoice
Attachment 4: Any other relevant documents