2023 (1) TMI 49 - HC - GST

Seeking release of seized goods alongwith conveyance - without waiting for the petitioner s response to the show cause notice, the impugned show cause notice under Section 130 of the Act had been issued - violation of principles of natural justice - HELD THAT - It is agreed that till this Court decides the matter finally, the interim relief in terms of deposit of fine in lieu of confiscation of vehicle being Rs. 2,50,062/- with penalty of Rs. 5,00,124/- under Section 129(1a) which includes 200% of the tax amount and bond value against the release of the goods to the tune of Rs. 13,89,224/- as per GST MOV-10 shall be furnished by the petitioner. On this being complied with, no coercive steps or further order under Section 130 shall be passed. By way of interim relief, it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the detention order passed in Form GST MOV-06 and Form GST MOV-10 dated 15.11.2022, subject to the conditions imposed - application allowed.

Summary

Issues:
Petition seeking to quash notice under GST Act and release of seized goods.

Analysis:
The petitioner, a Limited Liability Partnership (LLP) Firm engaged in trading, sought to quash a notice issued under Section 130 of the GST Act and an order of detention under Section 129 for a truck carrying goods. The petitioner had ordered scrap iron from a supplier and provided all necessary documentation for transportation. However, the vehicle was intercepted, and despite no discrepancies found during physical verification, a detention order was issued. The petitioner argued that the notice under Section 130 was premature and not following due procedure under Section 129. The petitioner emphasized compliance with tax and penalty payments as required under Section 129 for release of goods. Additionally, the petitioner highlighted the amendment to Section 130, making Section 129 a special provision for detention and seizure, and argued that confiscation without seizure was not permissible.

The petitioner also pointed out procedural lapses in the inspection process, citing requirements for reports to be prepared and uploaded within specific timeframes, which were not followed. The petitioner relied on a circular to argue that if no discrepancies were found, the goods should have been released immediately, rather than being detained. The petitioner contended that the order of detention was issued on the same day as the show cause notice, without proper procedure, and challenged the invocation of Section 130 based on alleged discrepancies in the transaction. The petitioner sought writs to quash the impugned notices and orders, release of the truck and goods, interim relief, and any other just orders.

The Court heard arguments from both parties and directed interim relief pending final decision, requiring the petitioner to deposit fines and penalties in lieu of confiscation. The Court ordered the release of goods and conveyance upon compliance with specified conditions. The matter was tagged with another case for further consideration. The judgment addressed the core issue of challenging the detention and confiscation under the GST Act, providing interim relief while the case was pending further review.