2019 (3) TMI 1563 - HC - GST

Imposition of penalty and redemption fine - Confiscation - FORM GST MOV-10 - Held that - A perusal of the impugned notice reveals that in paragraphs 2, 3 and 4 thereof, there are various blanks which have not been filled in which makes it manifest that the procedure as required under the provisions of the Act as referred to in paragraphs 2, 3 and 4 have not been followed by the competent authority prior to issuance of the said notice. Issue Notice to the respondents returnable on 3rd April, 2019.

Summary

Issues:
1. Compliance with procedural requirements under the Central Goods and Services Act, 2017.
2. Validity of the notice for confiscation of goods and levy of penalty under section 130 of the Act.
3. Non-compliance with statutory provisions by the competent authority.

Comprehensive Analysis:

Issue 1: Compliance with procedural requirements under the Central Goods and Services Act, 2017
The petitioner sought relief regarding the notice for confiscation of goods or conveyance and levy of penalty under section 130 of the Central Goods and Services Act, 2017. The advocate highlighted that the concerned officer must issue a notice under section 129 of the Act, provide an opportunity for a hearing, and then pass an order. It was argued that the initiation of proceedings under section 130 of the IGST Act is only permissible if there is non-compliance with the order passed under section 129. The impugned notice was found to impose penalties without following the necessary procedures under section 129, raising concerns about procedural compliance.

Issue 2: Validity of the notice for confiscation of goods and levy of penalty under section 130 of the Act
Upon examination of the impugned notice, it was observed that crucial sections were left blank, indicating a lack of adherence to the procedural requirements mandated by the Act. The notice sought to impose penalties, redemption fines, and confiscation under section 130 without initiating proceedings under section 129, which is a violation of the legal provisions. The court noted the absence of essential details in the notice, indicating a failure to comply with the prescribed procedures before resorting to the provisions of section 130.

Issue 3: Non-compliance with statutory provisions by the competent authority
The court issued a notice to the respondents, directing them to appear and show cause as to why costs should not be imposed for non-compliance with relevant statutory provisions. The authority's failure to fill in essential details in the notice, as required by the Act, was considered a violation of statutory provisions. The respondents were permitted to release the vehicle and goods upon payment of the tax amount specified in the notice, with the provision for direct service.

In conclusion, the judgment highlighted the importance of procedural compliance under the Central Goods and Services Act, 2017, emphasizing the necessity of following prescribed steps before imposing penalties and confiscation under section 130. The court's decision to issue a notice to the respondents and allow the release of goods upon tax payment underscored the significance of adhering to statutory provisions in such matters.