2020 (4) TMI 798 - 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:
1. Validity of the impugned Notice in Form GST MOV-10 dated 2.3.2019
2. Release of truck no.HR-55 M 3014 along with the goods contained therein
3. Compliance with statutory provisions under sections 129 and 130 of the Central Goods and Services Tax Act, 2017

Detailed Analysis:
1. The petitioner sought relief through a Writ Application under Article 226 to quash the impugned Notice in Form GST MOV-10 dated 2.3.2019 issued by Respondent No.2. The petitioner argued that the notice sought to impose penalties without following the required procedures under sections 129 and 130 of the Act. The court noted the petitioner's compliance with tax and penalty payments under section 129 and directed the release of the truck and goods pending further proceedings under section 130.

2. The court acknowledged the order passed by a Coordinate Bench regarding the proper procedure to be followed by authorities in cases of goods in transit in contravention of the Act. The court emphasized the necessity of issuing a notice under section 129 before resorting to section 130 for penalty and confiscation. The court directed the release of the truck and goods upon payment of tax, with the petitioner required to cooperate if the petition did not succeed ultimately.

3. The court referenced a previous judgment regarding the detention and seizure of goods and conveyances under the Act. It highlighted the importance of examining the nature of contraventions closely and determining if there was an intent to evade tax before invoking section 130 for confiscation. The court emphasized that authorities must have justifiable grounds to issue a notice of confiscation under section 130, and mere suspicion is not sufficient. The judgment clarified the need for a strong case and detailed reasons before invoking section 130 at the threshold, emphasizing the penal nature of confiscation actions.

In conclusion, the court disposed of the writ application, making the rule absolute to the extent mentioned, and left it to the applicant to establish that the show cause notice issued in GST-MOV-10 should be discharged based on the principles outlined in the judgment.