2023 (3) TMI 874 - HC - GST

Seizure of goods alongwith vehicle - case of petitioner is that while issuing the show cause notice, the authority never intended to invoke the jurisdiction under section 130 of the Act and further that without succeeding steps under section 129 releasing the goods, the invocation of section 130 readily stands to be arbitrary and illlegal exercise of powers. HELD THAT - As far as the release of the goods are concerned, the prayer of the petitioner is found reasonable. The goods could be released as per the precedent in Irshadbhai Hamidbhai Rain 2022 (12) TMI 1025 - GUJARAT HIGH COURT , by imposing stricter condition of securing amount of tax and penalty. The proceedings would continue under section 130 of the Act. In this regard, attention of the court was invited to the order of the Apex Court in State of Punjab vs. M/s. Shiv Enterprises and Ors. being Civil Appeal No. 359 of 2023 arising out of SLP (C) No. 19295 of 2022) 2023 (1) TMI 842 - SUPREME COURT wherein in the similar circumstances, the Apex Court was of the view that the proposed notice under section 130 was yet to be adjudicated. The court finds it appropriate to dispose of the present petition with certain conditions and directions. Learned advocate for the petitioner stated that the petitioner is ready to comply with the conditions of the very nature imposed in Irshadbhai Hamidbhai Rain - it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to impugned order dated 25.11.2022 (GST MOV 10) subject to the following conditions imposed. Petition allowed in part.

Summary

Issues involved:
The issues involved in the judgment are the challenge to two orders: one passed under section 129(2) of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017, and the other under section 130 of the Act resulting in the confiscation of goods.

Challenge to Order under Section 129:
The petitioner transported metal scrap from Pune to Gujarat, intercepted by authorities leading to orders under sections 129 and 130 of the Act. Section 129 deals with detention, seizure, and release of goods and conveyances in transit, providing conditions for release and penalties for non-compliance.

Challenge to Order under Section 130:
Section 130 relates to confiscation of goods or conveyances and levy of penalty, authorizing confiscation in cases of contravention of tax laws. The section outlines the process of adjudication, giving the owner the option to pay a fine in lieu of confiscation.

Arguments and Precedents:
The petitioner challenged the orders, claiming arbitrariness and illegal exercise of power, citing a precedent for the release of goods on certain conditions. The respondent argued that adjudicatory proceedings under section 130 must continue, emphasizing the need for due process.

Court's Decision and Directions:
The court found the petitioner's request for the release of goods reasonable, imposing conditions similar to a previous case for release. The court directed the continuation of proceedings under section 130, citing a Supreme Court decision on premature interference with notices. The judgment allowed the petition partly, directing the release of goods subject to specified conditions and the continuation of adjudicatory proceedings within a set timeframe.

Conclusion:
The judgment addressed the challenges to orders under sections 129 and 130 of the Act, balancing the release of goods with the need for adjudication. The court provided specific conditions for the release of goods while allowing the adjudicatory process to proceed in accordance with the law.