2022 (1) TMI 850 - HC - GST

Detention of goods alongwith vehicle - gold ornaments - confiscation of goods - proceedings initiated under Section 129 as well as under Section 130 of the Central Goods and Service Tax Act 2017 - HELD THAT - It is noticed from Ext.P8, that the respondent has given a reason for initiating proceedings under Section 130. The correctness or otherwise of the said reason is not a matter which can be considered by this Court under Article 226 of the Constitution of India, especially in the light of the fact that, petitioner was not in possession of any documents contemplated under law. Whether the transport of gold was with an intention to evade tax or not is a matter which requires appreciation of disputed facts and hence the statutory authority will have to consider the same after appreciating the facts. This is not a fit case for invoking the extraordinary jurisdiction under Article 226 of the Constitution of India. Hence there is no merit in this writ petition - Since it is submitted that the petitioner was heard sometime in the past in order to render justice to both sides, the respondent shall afford an opportunity of a fresh hearing to the petitioner on 17/1/2022 at 11 am - Petition dismissed.

Summary

Issues:
Challenge to proceedings under Section 129 and Section 130 of the Central Goods and Service Tax Act 2017.

Analysis:
The petitioner, a goldsmith from Rajasthan, was detained by the Sub-Inspector of Police in Kerala while carrying gold jewelry for display. The respondent seized the gold ornaments and issued an order of detention under Section 129(1) of the CGST Act. The petitioner contended that there was no intention to evade tax and sought release of the goods by paying applicable tax and penalty under Section 129(1).

The petitioner argued that there was no material to assume an intention to evade tax as required under Section 130 of the CGST Act. The Government Pleader contended that the petitioner lacked documents to prove the purpose of transporting the gold ornaments, leading the respondent to suspect tax evasion. It was emphasized that the jurisdiction under Article 226 of the Constitution of India could not be invoked in the presence of disputed facts, and the petitioner should seek an order of adjudication under Section 130.

The court observed that the reason for initiating proceedings under Section 130 was provided by the respondent, and the matter involved disputed facts regarding the intention to evade tax. The court held that such matters should be considered by the statutory authority after appreciating the facts, making it unsuitable for the court's intervention under Article 226. The court dismissed the writ petition, directing the respondent to provide the petitioner with a fresh hearing opportunity.

In conclusion, the court dismissed the writ petition, stating that the matter required adjudication by the statutory authority due to disputed facts regarding tax evasion intention. The petitioner was granted a fresh hearing opportunity to present their case, emphasizing the need for proper adjudication in accordance with the law.