2022 (10) TMI 1065 - HC - GST

Confiscation of goods - It is a case of the petitioner that during the course of transit, the Lorry No. OR-04-N-1161 carrying the aforesaid goods was intercepted by the respondent No.3 at 2.10 pm on 29.06.2022 - section 130 of the CGST Act - HELD THAT - By way of interim relief, it would be just and proper to direct the respondents to release the goods and conveyance of the petitioner, however, upon imposition of suitable condition on the petitioner - As could be seen from the impugned order, the penalty is calculated at Rs. 6,50,970/-. The same amount is calculated towards the fine in lieu of confiscation of conveyance. It will be expedient if the petitioner is asked to deposit Rs. 13 lakhs and furnish bank guarantee of Rs. 36,16,500/- of any nationalised bank till final disposal of this petition as a part of condition for grant of interim relief. Resultantly, by way of interim relief the respondents are directed to release the goods and conveyance of the petitioner on condition that the petitioner deposits with the competent authority of the respondents an amount of Rs. 13 lakhs within 10 days. The petitioner shall further comply with the condition of furnishing bank guarantee of Rs. 36,16,500/- to be furnished within 10 days alongwith deposit of amount of Rs. 13 lakhs - Direct service for respondent No.2 is permitted.

Summary

Issues:
Challenge to order under CGST Act, Breach of principles of natural justice, Grant of interim relief

Analysis:
1. The petitioner challenged an order passed by the State Tax Officer under the Central Goods and Services Tax Act, 2017 regarding the confiscation of goods being transported. The petitioner contended that the authorities acted without jurisdiction by invoking section 130 of the Act, which was independent of section 129. The petitioner argued that the quick succession of actions by the authorities deprived them of the opportunity to respond, violating principles of natural justice.

2. The Court acknowledged the need for a detailed examination of the petitioner's contentions but observed that the authorities' swift actions compromised the petitioner's right to reply, constituting a breach of natural justice. Consequently, the Court found a prima facie case for granting interim relief due to the prejudice caused to the petitioner by the hasty decision-making process.

3. The Court, therefore, directed the respondents to release the confiscated goods and conveyance of the petitioner, subject to certain conditions. The petitioner was instructed to deposit a specified amount and furnish a bank guarantee as part of the interim relief conditions. Failure to comply with these conditions would result in the vacation of the interim relief order, ensuring the petitioner's adherence to the imposed requirements for the release of the goods and conveyance.

4. Additionally, the Court allowed direct service for one of the respondents and emphasized the importance of the petitioner fulfilling the conditions set forth for the grant of interim relief. The detailed analysis of the issues involved in the legal judgment highlighted the procedural irregularities, the need for upholding principles of natural justice, and the Court's decision to grant interim relief with specific conditions to safeguard the interests of the petitioner.