2021 (10) TMI 1383 - HC - GST

Detention of goods alongwith vehicle - discrepancy found in the documents visa-vis the goods being transported or not - discrepancies in respect of some post transactions of the buyer and the buyer had claimed some wrongful input tax credit - HELD THAT - In the case of Mahadev Enterprise 2016 (5) TMI 1274 - GUJARAT HIGH COURT , the Court has held that each matter has to be decided on its own facts and the Tribunal while deciding the case of one party cannot place reliance upon the facts which have come to its knowledge only in another proceeding and apply them to a third party who has no connection with those proceedings. The Court found that there was a complete absence of any materials on record establishing the transaction made being non-genuine. There was also no material to show that the dealer, at any point of time, had been called upon to establish the genuineness of such transactions or to produce any documentary evidence. Adverting to the facts on hands, it is not in dispute that the goods along with the vehicle, when were in transit, was stopped by respondent No.2 and the driver had produced the invoice and e-way bill and other documents as required by the authority concerned. There was also an order for physical verification passed in Form GST MOV 2 and the report was issued in the form of GST MOV 4. It is not in dispute that there was absence of discrepancies and anomalies in the documents when compared with the goods which were being transported. The only ground was the vehicle and goods had been seized, was because of the credential of the buyer to whom were goods being sent. In this case, it is alleged that the buyer, in the past, had taken wrong credit. The buyer also responded to the email sent by the petitioner that no proceedings had been initiated against him under the GST Act in relation to the claim of input tax credit in respect of the past transactions and yet, that is the ground for initiation of action. Considering the e-way as well as invoices produced by the driver, since, are in order, the goods and the conveyance are ordered to be released. Resultantly, this petition is allowed directing release of goods and conveyance. However, the show-cause notice of inquiry against the purchaser which has been initiated, there shall be no interference. Without opining anything on merits and without intervening show-cause notice that may be contemplated against the said buyer as well as qua the present petitioner in that regard (if any), this petition is allowed. The petition is disposed off.

Summary

Issues Involved:
1. Quashment of the detention order in Form GST MOV 6.
2. Quashment of the confiscation notice in Form GST MOV 10.
3. Release of goods and vehicle.
4. Provisional release of goods and vehicle.
5. Interim relief for release of goods and vehicle.

Detailed Analysis:

1. Quashment of the Detention Order in Form GST MOV 6:
The petitioner sought to quash the detention order issued in Form GST MOV 6, arguing that it was "wholly without jurisdiction, arbitrary and illegal." The petitioner contended that the goods were accompanied by all necessary documents (tax invoice, transport receipt, and e-way bill) and that no discrepancies were found during the physical verification. The court noted that the physical verification report in Form GST MOV 4 found no discrepancies, and the detention order was issued without valid grounds. The court referenced the case of *Insha Trading Company vs. State of Gujarat*, where it was held that detention orders issued without finding discrepancies in documents are not valid.

2. Quashment of the Confiscation Notice in Form GST MOV 10:
The petitioner also sought to quash the confiscation notice issued in Form GST MOV 10, arguing it was issued arbitrarily based on discrepancies related to post-transaction activities of the buyer, who allegedly claimed wrongful input tax credit. The court observed that no proceedings had been initiated against the buyer under the GST Act, and the confiscation notice was issued without proper grounds. The court referenced the case of *Mahadev Enterprise vs. State of Gujarat*, where it was held that input tax credit cannot be denied without establishing that the transactions are not genuine.

3. Release of Goods and Vehicle:
The petitioner requested the release of the detained goods and vehicle. The court noted that the documents produced by the driver (invoice and e-way bill) were in order, and no discrepancies were found during the physical verification. The court referenced the case of *Majid Bilalbhai Akbani vs. State of Gujarat*, where it was held that goods and conveyance should be released if valid documents are produced. The court ordered the release of the goods and vehicle, emphasizing that the detention was based on the buyer's past transactions, which were not relevant to the current transport.

4. Provisional Release of Goods and Vehicle:
In the alternative, the petitioner sought provisional release of the goods and vehicle. The court, having already ordered the release of the goods and vehicle based on the validity of the documents, did not need to address this issue separately.

5. Interim Relief for Release of Goods and Vehicle:
The petitioner sought interim relief for the release of the goods and vehicle pending the final hearing. The court, having ordered the release of the goods and vehicle based on the validity of the documents, effectively granted this relief.

Conclusion:
The court allowed the petition, directing the release of the goods and conveyance. The show-cause notice of inquiry against the purchaser would proceed without interference. The court emphasized that the detention and confiscation were not sustainable as the documents were in order and there were no discrepancies. The request for a bond from the petitioner was not found sustainable, as there was no contrary evidence against the petitioner in relation to the current transaction.