2021 (12) TMI 1413 - HC - GST

Maintainability of petition - Detention of goods alongwith the conveyance - detention order reflects the seller and dealer being suspicious but the order is silent on the alleged discrepancies as no reason has been given with regard to the suspicious parties - HELD THAT - It emerges from the record that the information had been received from the controlling authority by the respondent that the said vehicle has certain discrepancies, therefore, the same was intercepted at Kamrej Toll Plaza, Surat at 12.40 pm. The driver when was asked for the documents, he provided the invoice as well as the e-way bills and it was revealed that the goods were being transferred from K.K.Traders, Kannur, Kerala to Shri Nandha Trade Mart, Gujarat. The MOV-10 and MOV-02 had been issued to the driver of the vehicle and subsequently MOV-04 was also issued for physical verification of the goods. From the e-way bills available, it appeared that 16 e-way bills had been generated of inward supply worth Rs. 04,79,31,650/- in the month of June, 2021. The Deputy Commissioner was communicated this and the physical verification had taken place at Shri Nandha Trade Mart, Rajkot. It was found that it has a shop of 90 sq.ft. and there is no stock available although it had purchased goods worth Rs. 4.50 Crores (rounded off). The authority therefore initiated the proceedings under Section 130 of the CGST Act. The contact number of Mr. Akhil Proprietor of Shri Nandha Trade Mart was switched off, hence, there was a need to proceed against the purchaser of the goods. It also emerged that the e-way bills were generated on different vehicles i.e. TN-88-A-6772 and KL-10-BC-3796. The movement of vehicle when was verified on RFID data, it was found that from Kerala to Gujarat, the e-way bill had not matched with the RFID data. The said vehicle never travelled from Kerala to Gujarat on that particular route and hence, only billing was done without actual movement of goods. It is alleged by the respondent that this was with an intention to escape the tax liabilities. Shri Nandha Trade Mart had purchased from K.K.Traders, Karakattu Traders, Matteri Trading and Puthiyaveettil Agency. It was necessary to establish as to from where the purchase of goods had been made. Shri Nandha Trade Mart had not mentioned any kind of sale. The Kerala Authority had also cancelled the registration of the present petitioner on the ground that it has allegedly involved in the tax evasion. As the traders from whom Shri Nandha Trade Mart had purchased had not shown any purchases of stock and their sale of goods to the dealer of Gujarat was without their sale and purchase. The Court is disinclined to intervene and in absence of any breach of principles of natural justice or for that matter, with these prima facie nonacceptable details under the law, petition is DISMISSED.

Summary

Issues Involved:
Petition seeking writ of Mandamus to quash detention order, show cause notice, and confiscation order under CGST Act; Release of confiscated goods and conveyance without payment of tax and penalty; Stay on order of confiscation; Validity of detention order based on discrepancies; Allegations of tax evasion and revenue loss.

Analysis:

1. Detention Order and Show Cause Notice:
The petitioner sought relief to quash the detention order, show cause notice, and confiscation order under the CGST Act. The petitioner claimed that the goods were intercepted at Vasad Toll Plaza, accompanied by e-way bills and invoices, but were still detained without proper reason. The detention order imposed a hefty fine, allegedly exceeding the permissible limit under Section 130(2) of the CGST Act. The respondent contended that the detention was based on discrepancies and suspicions regarding the parties involved, leading to the interception at Kamrej Toll Plaza, Surat. The respondent highlighted discrepancies in e-way bills and invoices, suspicious business practices, and questionable credentials of both the petitioner and the recipient.

2. Confiscation and Demand of Tax:
The petitioner challenged the confiscation of goods and conveyance, along with the demand for tax, fine, and penalty. The respondent justified the actions based on findings of serious discrepancies, including mismatched vehicle movements and suspicious transactions. The respondent alleged that the petitioner and other traders involved were attempting to evade tax liabilities and cause revenue loss. The respondent's investigation revealed inconsistencies in business operations, lack of stock availability, and questionable purchases, leading to the initiation of proceedings under Section 130 of the CGST Act.

3. Court's Decision:
The Court declined to entertain the petition, citing robust facts and prima facie non-acceptable details under the law. The Court dismissed the petition, emphasizing the absence of breach of natural justice principles. The Court directed the petitioner to seek alternative remedies and approach the concerned authority for further action in accordance with the law. The Court refrained from delving into the merits of the case, urging the petitioner to pursue legal recourse through appropriate channels without being influenced by the dismissal of the petition.