2021 (2) TMI 39 - HC - GST

Seizure of two trucks - trucks were not in transit carrying any goods - Section 129 of GST Act, 2017 - HELD THAT - It is observed that at the end of the inquiry or investigation, if anything incriminating surfaces which may warrant issuance of MOV-10 to the writ applicant under Section 130 of the Act, the authority may do so in accordance with law. However, today, for the purpose of such inquiry or investigation, the two trucks may not be kept in the custody of the department. In such circumstances, we direct the respondent to release both the trucks on the writ applicant furnishing an undertaking in writing on oath before the concerned authority that till the conclusion of the inquiry or investigation, he shall not transfer the two trucks in favour of any other person or shall not part with the possession of the same or create any encumbrance upon the same. It shall be open for the writ applicant to use the two trucks in his normal course of business. We are saying so because in the event if the department deems fit to issue MOV-10 under Section 130 of the Act, 2017, then at least the goods should be secured for that purpose. Application disposed off.

Summary

Issues:
1. Seizure of trucks under Section 129 of the GST Act
2. Legality of the initiation of search proceedings
3. Issuance of summons under Section 70 of the GST Act
4. Stay on further proceedings by the respondent authority
5. Coercive steps against the petitioner
6. Release of the seized trucks subject to conditions

Analysis:
1. The judgment dealt with the seizure of two trucks owned by the writ applicant under Section 129 of the GST Act. The trucks were seized based on past contraventions of the Act and Rules. An inquiry was initiated, and a summons under Section 70 of the Act was issued. The court considered whether the seizure was justified when the trucks were not carrying goods and were seized from the office premises. The court ordered the release of the trucks with certain conditions to be fulfilled by the writ applicant.

2. The legality of the initiation of search proceedings was questioned by the writ applicant. The court did not interfere with the ongoing inquiry but directed the respondent to release the trucks subject to conditions. The court emphasized that any incriminating evidence found during the inquiry could lead to further action under Section 130 of the Act. The court clarified that the release of trucks was for the purpose of the inquiry and that the department should continue its investigation in accordance with the law.

3. The issuance of summons under Section 70 of the GST Act was also addressed in the judgment. The court expected the writ applicant to cooperate with the investigation and appear before the appropriate authority for interrogation or recording of statements. The court stressed the importance of the writ applicant's cooperation in the investigation process.

4. The court granted a stay on further proceedings by the respondent authority and restrained them from taking coercive steps against the petitioner. The court's decision to release the trucks was aimed at ensuring the writ applicant's ability to use them in the normal course of business, subject to the conditions imposed.

5. The judgment concluded by emphasizing the importance of cooperation from both parties in the investigation process. The court highlighted that it had not delved into the legality and validity of the inquiry, reiterating that it was the department's responsibility to conduct a thorough investigation in accordance with the law.