2020 (5) TMI 59 - 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 involved:
Challenge to detention order under Article 226 of the Constitution of India, release of truck and goods, validity of notice in Form GST MOV10, interim relief, interpretation of Sections 129 and 130 of the Central Goods and Services Act, 2017.

Detailed Analysis:

1. Detention Order Challenge: The petitioner filed a Writ Application under Article 226 seeking to quash the detention order dated 16.6.2019 and release truck No.GJ04X6804 with goods. The court noted a previous order directing release upon tax payment and an undertaking. The petitioner availed interim relief and the proceedings are at the show cause notice stage under Section 130 of the Act.

2. Interpretation of Sections 129 and 130: The judgment referenced a previous case highlighting the need for authorities to closely examine contraventions at detention and seizure stages. It emphasized the importance of intent to evade tax, presumption of culpable mental state under Section 135, and the need for a strong case to invoke Section 130 at the threshold. The judgment clarified that confiscation should be based on solid grounds, not mere suspicion.

3. Validity of Notice in Form GST MOV10: The court disposed of the application, making the rule absolute to a certain extent, indicating that it is now for the applicant to demonstrate why the show cause notice in GSTMOV10 should be discharged. The judgment underscored the necessity for authorities to act in good faith, with a genuine belief supported by materials, to avoid unnecessary detention and confiscation of goods.

In conclusion, the judgment delves into the intricacies of detention orders, release of goods, and the application of Sections 129 and 130 of the CGST Act, stressing the importance of a strong case for invoking confiscation provisions. It underscores the need for authorities to act in good faith, supported by solid grounds, rather than mere suspicion, to ensure fair and just outcomes in matters of tax evasion and confiscation.