2023 (8) TMI 1357 - HC - GST

Jurisdiction - power to confiscate goods - exercise of powers under Section 129 and thereafter switching over to Section 130 and passing order thereunder without availing the petitioner the benefits of release of the goods under Section 129 - violation of principles of natural justice - HELD THAT - Rule, returnable on 21.06.2023. By way of interim relief, the goods of the petitioner shall be released provided the petitioner complies with the conditions imposed - petitioner shall deposit with the competent authority of the respondents, total amount of penalty of Rs.8,34,832/-, tax is not assessed by the authorities - application disposed off.

Summary

Issues involved:
The issues involved in this case are the legality of detaining goods under Section 129 of the Goods and Services Tax Act, 2017 and the confiscation of goods under Section 130 of the Central Goods and Services Tax Act, 2017.

Detention of Goods under Section 129:
The petitioner's goods, aluminum ingots, being transported from Ahmedabad to Neemrana in Rajasthan, were detained by the respondent authorities under Section 129 of the Goods and Services Tax Act, 2017. The authorities inspected the conveyance on 07.04.2023 and issued an order for detention on 08.04.2023. The petitioner contended that the authorities intercepted and confiscated the goods in transit, exercising powers under Section 129 without providing the benefits of release under the said section. The petitioner argued that the exercise of powers under Section 129 and subsequently under Section 130 without availing the release benefits under Section 129 could be deemed as lacking jurisdiction.

Confiscation of Goods under Section 130:
In addition to the detention under Section 129, a notice dated 10.04.2023 was issued under Section 130 of the Central Goods and Services Tax Act, 2017, for the confiscation of the goods. The petitioner challenged the notice, claiming it to be arbitrary and contrary to the provisions of the Act. The petitioner's advocate highlighted that similar matters have been entertained by the court previously, where interim relief for the release of goods and conveyance was granted under certain conditions.

Interim Relief and Conditions:
The court, in response to the petition, directed that upon compliance with certain conditions, the goods and the vehicle shall be released by the authorities. The petitioner was required to deposit a penalty amount, furnish a bank guarantee towards fine, and file an undertaking regarding the payment of fines in case proceedings under Section 130 conclude against the petitioner. Non-compliance with these conditions would render the interim relief liable to be vacated. The court allowed the continuation and conclusion of proceedings under Section 130 but prohibited coercive steps against the petitioner until further orders. It was clarified that the court did not delve into the merits of the case pending adjudication under Section 130.