2021 (12) TMI 169 - HC - GST

Release of seized goods with vehicle - seeking to furnish explanation on the proposal for confiscation of the goods, transported and on the value of goods, tax and penalty estimated by the Proper Officer - Section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT - This is not a fit case to issue any interim order staying further proceedings pursuant to Exts.P6 and P6(a) notices or to direct release of the goods and the vehicle, which are the subject matter of proceedings for confiscation. The Statute itself provides for such a remedy. The Courts must be slow to exercise the power under Article 226 of the Constitution of India, especially in matters where Section 130 of the Act is invoked by the Proper Officer. The reluctance to exercise the extraordinary powers stems from the fact that such orders will have a tendency to interfere with the power conferred by the Statute. Even otherwise, if a party aggrieved by the proceedings under Section 130 of the Act has an alternative remedy, and if this Court interferes with proceedings under the Act, the scheme and purport of the Statute will be affected - In the instant case, the impugned notices refer to the statement of the driver of the vehicle and the enquiry conducted at the alleged business place of the supplier. The alleged loading of goods from different places renders even the e-way bill and the invoice suspect. The notice also refers to the fact that the business place of the supplier was found to be closed and there was no evidence of any trading activity that tallied with the local accounts. These and other circumstances enabled the Proper Officer to be prima facie satisfied that there was an intention to evade tax. This is not a fit case where an interim order can be granted as sought for and, hence, the same is rejected - Application dismissed.

Summary

Issues: Challenge to notices under Section 130 of the Central Goods and Services Tax Act, 2017; Request for interim order to stay further proceedings.

The petitioner challenged two notices issued under Section 130 of the Central Goods and Services Tax Act, 2017, which called for an explanation regarding the proposal for confiscation of goods and related tax and penalty. The petitioner argued that the conditions specified under Section 130 did not apply in this case, emphasizing the availability of physical invoices and e-way bills as sufficient requisites during transportation. The petitioner sought interference under Article 226 of the Constitution of India, claiming the notices were illegal. The Senior Government Pleader countered, stating that the notices were issued based on suspicion of tax evasion, supported by the driver's statement and discrepancies in the loading of goods. The court directed the petitioner to appear before the concerned officer for a hearing. The officer, after conducting the hearing, was satisfied with the intention to evade tax. Despite the petitioner's plea for an interim order, the court held that it was not a suitable case for such relief, as the statute itself provided remedies for such situations. The court highlighted the reluctance to interfere with proceedings under Section 130, emphasizing the availability of alternative remedies and the potential impact on the statutory scheme if the court intervened.

The court analyzed the circumstances, including the driver's statement, discrepancies in loading goods, and lack of trading activity at the supplier's business place, which led the Proper Officer to be prima facie satisfied with the intention to evade tax. Ultimately, the court concluded that an interim order was not warranted in this case. The court emphasized the importance of not hastily exercising powers under Article 226, especially in matters involving Section 130 of the Act, to avoid interference with statutory powers. The court highlighted the significance of alternative remedies and the potential disruption to the statutory scheme if courts routinely intervened in such proceedings. The court directed the Government Pleader to file a counter affidavit or statement and scheduled the next hearing date.