2020 (3) TMI 697 - HC - GST

Release of goods alongwith the truck - section 130 of CGST Act - HELD THAT - The 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. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT 2020 (2) TMI 1159 - GUJARAT HIGH COURT . Application disposed off.

Summary

Issues Involved:
1. Quashing and setting aside the impugned Notice dated 26.09.2019 in Form GST MOV-10.
2. Release of truck no. GJ-12-AZ-5184 along with the goods contained therein.
3. Interim relief for the release of the truck and goods.
4. Examination of the applicability of Section 130 of the GGST Act in the context of detention and seizure of goods.

Detailed Analysis:

1. Quashing and Setting Aside the Impugned Notice:
The petitioner sought a writ of mandamus to quash and set aside the impugned Notice dated 26.09.2019 in Form GST MOV-10 issued by Respondent No.2. The petitioner argued that the goods in question, imported from Italy, had already been subjected to integrated goods and services tax (IGST) at the time of import. Despite this, the respondent authorities issued a notice for confiscation under Section 130 of the GGST Act, which the petitioner claimed was unwarranted since all necessary documents, except the e-way bill, had been provided, and the e-way bill was generated immediately after interception.

2. Release of Truck and Goods:
The petitioner requested the court to direct the respondent authorities to release truck no. GJ-12-AZ-5184 along with the goods contained therein. The court noted that a coordinate Bench had previously issued an interim order directing the release of the vehicle and goods upon payment of the tax amount as computed by the respondent authorities. The petitioner had complied with this order and secured the release of the vehicle and goods.

3. Interim Relief:
The court provided interim relief by directing the release of the vehicle and goods, subject to the final outcome of the petition. This interim relief was granted based on the petitioner's compliance with the payment of tax and penalty, and the fact that the IGST had already been paid at the time of import.

4. Applicability of Section 130 of the GGST Act:
The court examined the applicability of Section 130 of the GGST Act, which deals with the confiscation of goods or conveyances. The court referenced a recent pronouncement in the case of Synergy Fertichem Pvt. Ltd. v. State of Gujarat, emphasizing that the authorities must closely examine the nature of the contravention and whether it was with an intent to evade tax. The court highlighted that not all contraventions justify invoking Section 130, especially if the contravention is trivial or does not indicate an intent to evade tax. The court criticized the practice of issuing confiscation notices under Section 130 at the threshold without proper application of mind and sufficient grounds.

The court concluded that the petitioner could rely on the observations made in the Synergy Fertichem case to argue that the show cause notice issued in GST-MOV-10 should be discharged. The court disposed of the writ application, making the rule absolute to the extent that it allowed the petitioner to challenge the show cause notice.

Conclusion:
The court provided interim relief by directing the release of the vehicle and goods upon payment of the tax amount. It emphasized the need for authorities to apply their minds and have justifiable grounds before invoking Section 130 of the GGST Act. The petitioner was allowed to challenge the show cause notice based on the principles laid down in the Synergy Fertichem case. The writ application was disposed of with the rule made absolute to the extent mentioned.