Synergy Fertichem: the line between detention under Section 129 and confiscation under Section 130
Officers move from detention to confiscation as though it were the next page of the same form. The Gujarat High Court explained why it is not.
In Synergy Fertichem Private Limited v. State of Gujarat (Gujarat High Court, 2019) the Court held that Sections 129 and 130 of the CGST Act operate in different fields. Detention and release under Section 129 applies to a contravention in transit. Confiscation under Section 130 requires an intent to evade payment of tax, which must be established and recorded, and cannot be assumed from the same facts that justified detention. A notice for confiscation issued simultaneously with detention, without independent material on intent, is unsustainable.
Two provisions, two thresholds
Section 129 deals with goods and conveyances in transit that are transported or stored in contravention of the Act or the rules. The consequence is detention or seizure, and release on payment of penalty, or on a bond with security.
Section 130 deals with confiscation. It applies where a person supplies goods liable to tax without accounting for them, or supplies without registration, or contravenes provisions with intent to evade payment of tax, among other situations. Confiscation extinguishes title.
The difference is intent. Section 129 can be triggered by a contravention. Section 130 requires the mental element in the situations that speak of evasion, and the officer must reach that conclusion on material.
What the Court laid down
The Court held that every contravention does not attract confiscation. An officer must first consider whether the contravention is of a kind that indicates an intent to evade, and must record his reasons.
It held that the two provisions are independent and that Section 130 is not a mechanical sequel to Section 129. Issuing a confiscation notice at the moment of detention, before any enquiry, betrays an absence of the required satisfaction.
It further held that even where confiscation is contemplated, the owner must be given an opportunity, and the option of redemption fine under Section 130(2) must be considered.
The Court also cautioned officers against using the threat of confiscation to compel payment at the roadside, which is the practice that produces most of this litigation.
The fact patterns that recur
An expired e-way bill because of a breakdown or a traffic restriction, with the goods and the invoice matching in every particular. This is at most a technical contravention and confiscation does not arise.
A clerical error in the vehicle number or the document number, addressed by Circular 64/38/2018-GST, which directs that penalty in such cases be limited to the nominal amount prescribed.
A genuine mismatch between the goods carried and the documents, or goods carried without any document at all. Here the department is on firmer ground and the enquiry becomes evidentiary.
Route deviation, where the officer infers diversion. The answer is usually a delivery challan, the consignee's confirmation, and the commercial reason for the route, and the department must show more than a map.
The practical sequence when a vehicle is stopped
Insist on the paper trail. MOV-01 statement of the driver, MOV-02 order of physical verification, the report in Part A of MOV-04, MOV-06 order of detention and MOV-07 notice of penalty. An officer who has not issued these has not followed the procedure, and the omission is the first ground.
Do not pay at the roadside without a MOV-07 quantifying the penalty and identifying the contravention. A payment made without a notice is difficult to recover and reads as an admission.
Where goods are perishable or high value, the commercial answer is release under bond and security while contesting the penalty, and Section 129 expressly permits it.
Where confiscation is threatened on the same facts as the detention, say so in writing immediately, citing Synergy Fertichem, and ask the officer to record the material on intent.
Authorities relied on
Sections 129 and 130 operate independently; confiscation requires an intent to evade payment of tax to be established and reasons to be recorded; a simultaneous confiscation notice without independent material is unsustainable.
Detention and penalty could not be sustained where the delay in delivery was caused by circumstances beyond the transporter's control and there was no intent to evade; costs were imposed on the department.
Where the contravention is a minor discrepancy in the e-way bill, proceedings under Section 129 should not be initiated and only the nominal penalty prescribed should be imposed.
What to do on Monday
Give every driver a one page instruction sheet: do not sign a blank statement, ask for MOV-01 to MOV-07 copies, call the tax desk before any payment.
Keep a standing template reply for detention that asserts the absence of intent and demands the procedural documents.
Where release is urgent, use the bond and security route under Section 129 and record that payment is under protest.
Log every detention with the officer, the ground and the outcome; a pattern of technical detentions on a route is itself material for a writ.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Can the officer demand tax as well as penalty at the roadside?
Section 129 as it now stands provides for penalty, not for tax and penalty. Check the quantification in MOV-07 against the provision as it applies to your date of detention.
Our e-way bill expired by six hours. What is the exposure?
On the authority of Satyam Shivam Papers and the circular, a technical expiry without any discrepancy in the goods or the invoice should not attract penalty at all, and certainly not confiscation.
The department has issued a MOV-10 confiscation notice with the detention order. Is that valid?
That is the precise practice Synergy Fertichem disapproved. Reply immediately demanding the material on which intent to evade was formed.
Should we go to the High Court or pay and contest?
For perishable or time critical consignments, seek release under bond and contest the penalty. For a clear jurisdictional excess or a confiscation notice without material, the writ route is faster than the appeal.
Is the transporter or the owner liable?
It depends on who was in contravention and whether the owner comes forward. The distinction affects the quantum and is worth taking, because departments default to the party present at the roadside.
In this cluster
- E-way bill law in 2026: generation, validity and the recent portal changes
- Section 129 detention: how to get the truck released today, and the penalty reduced later
- Section 130 confiscation: the conditions and where the department cannot go
- Expired e-way bill in transit: penalty, defence and precedent
- Clerical errors in the e-way bill and Circular 64/38/2018
- Vehicle detention on route deviation
- MOV-01 to MOV-11: the inspection paper trail and what to demand
- Section 68: inspection of goods in movement
- Perishable goods and expedited release
- Penalty on the transporter versus the owner of the goods
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.