2020 (2) TMI 523 - HC - GST

Levy of penalty and confiscation of goods - section 129(1) of the GST Act - writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount - HELD THAT - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of SSYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT 2019 (12) TMI 1213 - GUJARAT HIGH COURT . It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - Application disposed off.

Summary

Issues:
Challenge to detention and seizure of goods and conveyance under GST Act, legality of actions by authorities, applicability of Sections 129 and 130 of GST Act, release of goods and conveyance, interpretation of relevant legal provisions, recent pronouncement by the court.

Analysis:
1. The writ applicant sought relief through a Writ-Application under Article 226 challenging the detention and seizure of goods and conveyance under the GST Act. The applicant prayed for the quashing of the detention order and notice for confiscation and penalty, alleging them to be illegal, violative of natural justice, and against the provisions of the Act and Rules.

2. The Court noted a previous order directing release of the goods and conveyance upon payment of tax, and the applicant availed the benefit, getting the vehicle and goods released. The proceedings were at the show cause notice stage under Section 130 of the GST Act, to proceed as per law.

3. The Court referred to a recent judgment highlighting issues related to detention and seizure under Sections 129 and 130 of the Act. It emphasized the need for authorities to closely examine contraventions and intent to evade tax before invoking confiscation provisions. The judgment underscored that confiscation should be based on strong grounds, not mere suspicion, and should reflect a genuine intention to evade tax.

4. The Court clarified that Section 130 of the Act is an independent provision for confiscation in cases of intent to evade tax, emphasizing the penal nature of such action to deter tax evasion. It stressed the importance of authorities recording strong reasons for invoking confiscation at the outset and ensuring a genuine belief based on material evidence.

5. The applicant was directed to establish why the show cause notice should be discharged, indicating the need for a valid defense against the notice issued. The writ application was disposed of with the rule made absolute to the extent mentioned, indicating a decision in favor of the applicant on the specific issues addressed in the judgment.