2022 (4) TMI 508 - HC - GST

Seizure of goods alongwith conveyance - GST registration obtained by fraudulent documents - tax evasion through bogus billing activities - HELD THAT - he adjudication of this writ application may take some time. If the writ applicants are ready and willing to deposit the amount of ₹ 15,46,182/- towards tax and penalty, then we should order release of the goods and the conveyance. Let Notice be issued to the respondents, returnable on 7th April 2022.

Summary

Issues:
Challenge to legality and validity of proceedings initiated by respondent under Form GST MOV-10; Invoking Section 130 of the Act for tax evasion; Detention of goods and conveyance without lawful authority; Request for release of goods and conveyance upon depositing tax and penalty.

Analysis:
The judgment delivered by the Gujarat High Court involved a challenge to the legality and validity of proceedings initiated by the respondent under Form GST MOV-10. The discrepancies recorded in the form indicated potential tax evasion activities by the writ applicants involving bogus billing chains. The respondent alleged an intention to evade tax and called upon the writ applicants to show cause as to why confiscation under Section 130 of the Act should not be carried out.

The petitioner's senior counsel argued that even if the discrepancies were true, invoking Section 130 was premature as these issues could be addressed during final adjudication. The detention of goods and conveyance was deemed unauthorized. The counsel expressed the petitioner's readiness to deposit the tax amount of ?7,73,091 along with an equivalent penalty, seeking the release of goods and conveyance pending further proceedings.

Citing a precedent from a Coordinate Bench, the counsel emphasized the possibility of releasing the goods and conveyance upon depositing ?15,46,182 towards tax and penalty. Considering the prolonged adjudication process, the court directed the petitioner to deposit the said amount with the respondent for the immediate release of goods and conveyance. A notice was issued to the respondents for further proceedings scheduled on 7th April 2022, with interim relief granted upon deposit of the specified amount.

In conclusion, the judgment addressed the challenge to the legality of proceedings under Form GST MOV-10, the invocation of Section 130 for tax evasion, the unauthorized detention of goods and conveyance, and the conditional release of goods upon depositing tax and penalty. The court's decision aimed to balance the interests of both parties pending a detailed adjudication of the matter.