2020 (4) TMI 796 - HC - GST

Release of confiscated goods alongwith the vehicle - section 129(1) of the GST 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 - 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 order under GST Act, release of goods and conveyance, applicability of Sections 129 and 130, interpretation of contravention, issuance of confiscation notice, necessity of intent to evade tax for confiscation.

Analysis:
1. The petitioner filed a Writ Application challenging the detention order of goods and conveyance under Section 129(1) of the GST Act and the notice for confiscation and penalty under Section 130. The petitioner sought a writ of mandamus to quash the orders, interim relief for release of goods, and any other appropriate order.

2. The Court noted a previous order directing release of the goods upon payment of tax. The petitioner availed this order and got the goods released. The proceedings are at the show cause notice stage under Section 130 of the CGST Act, 2017. The Court emphasized that proceedings would continue as per law.

3. The Court referred to a previous judgment and highlighted the importance of examining contraventions closely to determine intent to evade tax. It emphasized that not all contraventions automatically lead to confiscation under Section 130. The Court discussed the necessity for a strong case to invoke Section 130 at the detention stage and the importance of recording reasons for such belief.

4. The Court clarified that the action of confiscation must be in good faith and not a mere pretense. It stressed the need for intense application of mind before issuing confiscation notices. The judgment reiterated that confiscation is a penal action to deter tax evasion and should not be invoked without proper grounds.

5. The Court disposed of the Writ Application, making the rule absolute to the extent mentioned. The petitioner was directed to establish that the show cause notice deserved to be discharged. The judgment emphasized the need for authorities to carefully consider contraventions and intent before invoking confiscation under Section 130 of the Act.