Section 129 lets officers stop goods moving in breach of the Act — typically without a valid e-way bill or invoice — and release them only on payment of a penalty or security. Since 2022 it is a penalty-only provision with tight timelines, and courts have refused to treat technical lapses as evasion.
Key points
- Under section 129(1) of the CGST Act, 2017 goods transported or stored in transit in contravention of the Act, with the conveyance and documents, may be detained or seized, and are released on payment of penalty or furnishing equivalent security.
- From 01.01.2022 the penalty is 200% of the tax payable where the owner comes forward, and the higher of 50% of the value and 200% of the tax where the owner does not; for exempted goods, 2% or 5% of value respectively, capped at Rs. 25,000.
- A notice must issue within seven days of detention and an order within seven days of its service; no penalty without a hearing (section 129(3)–(4)).
- If the penalty is not paid within fifteen days of the order, the goods or conveyance may be sold; a conveyance is released on the transporter paying the penalty or Rs. 1 lakh, whichever is less (section 129(6)).
- In Assistant Commissioner (ST) v Satyam Shivam Papers (2022) the Supreme Court upheld the quashing of a penalty where an e-way bill expired because traffic was blocked, holding that evasion cannot be presumed from such a lapse.
The provisions
129(1)Detention and release on penalty
Statutory text
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,-
1[(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;
(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;]
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.
2[****]
*Enforced w.e.f. 1st July, 2017.
1. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 117(i) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021.
"(a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty;
(b) on payment of the applicable tax and penalty equal to the fifty per cent. of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty;"
2. Omitted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 117(ii) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for
"(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances."
- Rules 138A to 138D, CGST Rules
- Circular 41/15/2018-GST (Forms GST MOV-01 to MOV-11); Circular 64/38/2018-GST
Case on this provision
Assistant Commissioner (ST) v Satyam Shivam Papers Pvt Ltd
SLP (C) No. 21132 of 2021 · 12.01.2022 · Supreme Court, 2 Judges (Dinesh Maheshwari, Hrishikesh Roy JJ.)
- Facts
- A paper distributor generated an e-way bill for an intra-State delivery on a Saturday. The vehicle could not deliver that day because of traffic blocked by political rallies; it was intercepted after the e-way bill had expired, and the goods were detained and tax and penalty imposed. The Telangana High Court quashed the order with costs.
- Held
- The department's petition was dismissed. On the facts there was no intent to evade tax: the delivery was delayed by a traffic blockage, and an expired e-way bill does not by itself show evasion. The Court found the inference of evasion baseless and the proceedings unwarranted, and increased the costs payable by the State, permitting recovery from the officers responsible.
- Here
- Detention and penalty need a contravention with some evasive character; a technical lapse explained by circumstances beyond control, with tax duly charged on the invoice, does not justify a section 129 penalty.
129(3)–(6)Notice, order, hearing and sale
Statutory text
3[(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).]
(4) 4[No penalty] shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.
5[(6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3):
Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less:
Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.]
3. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 117(iii) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021.
"(3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c)."
4. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 117(iv) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for "No tax, interest or penalty."
5. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 117(v) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for
"(6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:
Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer."
What it means
The section fixes the timelines: a notice within seven days of detention and an order within seven days of its service. Payment of the penalty concludes the proceedings (sub-section (5)), but the Supreme Court held in ASP Traders v State of Uttar Pradesh (24.07.2025) that where the person has filed objections or paid under protest, a reasoned order in MOV-09 must still be passed so that it can be appealed.
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- What is the penalty for transporting goods without an e-way bill?
- Under section 129 of the CGST Act, 200% of the tax payable if the owner comes forward, or the higher of 50% of value and 200% of tax otherwise; for exempted goods, 2% or 5% of value up to Rs. 25,000.
- Is an expired e-way bill always penalised?
- No. In Satyam Shivam Papers (2022) the Supreme Court upheld the quashing of a penalty where the e-way bill expired because of a traffic blockage, finding no intent to evade.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
The detention order is in Form MOV-06 and the notice and order in MOV-07 and MOV-09. These forms are prescribed by Circular 41/15/2018-GST, not by the rules: rules 138A to 138D deal with the documents to be carried, verification and the inspection report, and contain no MOV forms. The circular and its forms were not revised after the 2022 amendment and still recite the earlier tax-and-penalty basis. Minor discrepancies listed in Circular 64/38/2018-GST — such as a spelling error or a wrong digit in the PIN code — attract only a fixed penalty under section 125, not detention. Before 01.01.2022, release required tax plus penalty, and proceedings could move to confiscation under section 130 if not paid; the two provisions are now independent.