2019 (5) TMI 642 - HC - GST

Release of seized goods - GSTN stated in the e-way bill etc. obtained fraudulently - Confiscation - HELD THAT - On a perusal of the order of confiscation made under section 130 of the Goods and Services Tax Act, 2017 read with the relevant provisions of the State Goods and Services Tax Act/ integrated Goods and Services Tax Act, it is evident that the authority concerned has not applied its mind to the objections raised by the petitioner and has perfunctorily passed the impugned order confiscating the conveyance of the petitioner. The petitioner has made out a strong prima facie case for grant of interim relief. Issue Rule returnable on 19th June, 2019.

Summary

Issues Involved:
1. Confiscation of goods under GST laws without proper inquiry.
2. Alleged default on the part of authorities in granting GSTN.
3. Prima facie case for grant of interim relief regarding confiscated conveyance.

Analysis:
1. The judgment addresses the issue of confiscation of goods under GST laws without proper inquiry. The court noted that out of 31 bills and lorry receipts carried by the apprehended conveyance, goods were released in most cases. However, in the case of two lorry receipts, the owner did not show up for goods release. It was found that the GSTN on these receipts was obtained using someone else's documents without proper authorization. Despite this, no criminal proceedings were initiated against the individual responsible. The court criticized the authorities for penalizing the transporter instead of tracing the real culprit, highlighting the lack of action under relevant GST laws.

2. The judgment also discusses the alleged default on the part of authorities in granting GSTN without proper inquiry. The court observed that the GSTN was issued without thorough investigation, indicating negligence on the part of the authorities. It was noted that the authorities failed to trace the real culprit behind the unauthorized use of documents for obtaining GST registration. The court emphasized the need for proper scrutiny before issuing GSTN to prevent such instances of misuse.

3. Furthermore, the judgment addresses the petitioner's plea for interim relief regarding the confiscated conveyance. The court found that the authority confiscating the conveyance did not consider the objections raised by the petitioner and passed the order perfunctorily. Considering the circumstances, the court granted interim relief directing the respondents to release the conveyance subject to certain conditions. The petitioner was required to file an undertaking to discharge any liability under the CGST/GGST Act if found liable in the future, while retaining the right to challenge the order before the appropriate forum.

In conclusion, the judgment highlights the importance of conducting proper inquiries in cases of confiscation under GST laws, emphasizes the need for due diligence in issuing GSTN, and provides interim relief to the petitioner based on the prima facie case presented.