2020 (5) TMI 29 - HC - GST

Release of confiscated goods alongwith vehicle - section 129 of CGST Act - HELD THAT - The writ applicant availed the benefit of the interm-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 impugned Notice in Form GST MOV-10 dated 2.3.2019
Release of truck no.RJ-14 GH 3440 and goods contained therein
Ad interim relief pending final hearing
Applicability of sections 129 and 130 of the Central Goods and Services Tax Act, 2017
Procedural compliance and legal grounds for detention and seizure of goods

Analysis:
The Writ Application challenged the Notice in Form GST MOV-10 dated 2.3.2019 and sought the release of truck no.RJ-14 GH 3440 along with the goods. The petitioner relied on sections 129 and 130 of the Central Goods and Services Tax Act, 2017, emphasizing the procedural requirements for detention and seizure of goods. The Court noted that the petitioner had already paid the tax and penalty under section 129. The Court directed the release of the truck and goods, subject to the petitioner filing an undertaking. The proceedings were at the show cause notice stage under Section 130, and the Court allowed the proceedings to continue as per law.

The judgment referenced a previous case, Synergy Fertichem Pvt.Ltd V/s. State of Gujarat, highlighting the importance of examining contraventions closely before invoking Section 130. The Court emphasized the need for authorities to assess the nature of contraventions and the intent to evade tax. It cautioned against issuing confiscation notices without sufficient grounds, stressing that confiscation is a penal action. The judgment underscored that not all contraventions warrant confiscation under Section 130 and that authorities must establish a strong case before invoking it at the initial stage.

The Court emphasized the need for authorities to justify invoking Section 130 with strong reasons and material evidence. It highlighted that the formation of opinion for confiscation must reflect a genuine application of mind and not be based on mere suspicion. The judgment stressed the importance of good faith in actions and the necessity for authorities to disclose the materials forming the basis of their belief. It outlined the criteria for invoking Section 130 at the threshold, emphasizing the need for a strong case supported by valid reasons and evidence.

In conclusion, the Court disposed of the writ application, making the rule absolute to the extent mentioned. The judgment reiterated the importance of procedural compliance, legal grounds for detention and seizure, and the necessity for authorities to justify invoking Section 130 with strong reasons and evidence. The applicant was directed to substantiate the discharge of the show cause notice issued in GST-MOV-10.