2025 (2) TMI 1092 - HC - GST

Challenge to Exhibit-P3 notice - time limitation - seeking for a direction to provisionally return the gold seized - HELD THAT - The time limit for completing the investigation has been extended in exercise of the power under the proviso to Section 67 of the Act. Hence the contention of the petitioner based on the limitation prescribed under Section 67 of the GST Act is not legally tenable. A perusal of Exhibit-P3 notice of confiscation indicates that on verification of the registers recovered from the petitioner s shop/residence it was prima facie observed that he had carried out sale of old gold worth Rs.47.73 Crores without having any valid GST registration and that majority of the gold were procured from another entity and supplied to another jewellery without the support of any tax invoice/other relevant documents as mandated by the Goods and Services Tax statutes. The initiation of proceedings under Section 130 cannot prima facie be said to be without any authority. It is for the petitioner to participate in the said proceedings. Based upon the orders to be passed thereon appropriate proceedings can be initiated. Conclusion - The initiation of proceedings under Section 130 was not without authority and the petitioner should participate in those proceedings. The petitioner was granted the option to utilize Section 130(2) of the GST Act for seeking the release of goods during the confiscation proceedings. Reserving the liberty of the petitioner to have recourse to Section 130 (2) of the GST Act during the pendency of the proceedings this writ petition is dismissed.

Summary

The petitioner challenged Exhibit-P3 notice and sought a direction to provisionally return the gold seized under Exhibit-P1, based on a bank guarantee and bond. The petitioner, a traditional goldsmith from Maharashtra, alleged that 3522.14 gms of gold were seized during an inspection under the GST Act. The petitioner argued that the goods should be released on bond due to the expiration of the limitation period under Section 67 of the GST Act. However, the Government Pleader contended that the time limit was extended by an order from the Joint Commissioner of State Tax, rendering the claim for provisional release legally unsustainable. The Court found that the extension of the investigation time limit under the proviso to Section 67 of the Act made the petitioner's limitation argument untenable.Additionally, the Exhibit-P3 notice of confiscation revealed that the petitioner had allegedly sold old gold worth Rs.47.73 Crores without valid GST registration and proper documentation. Despite the petitioner's reliance on Section 67(6) of the GST Act for provisional release, the Court determined that since proceedings under Section 130 of the GST Act had commenced with Exhibit-P3 notice, the release of goods under Section 67(6) did not apply. The Court emphasized that the petitioner had not sought the benefit of Section 67(6) before the Exhibit-P3 order.The Court concluded that the initiation of proceedings under Section 130 was not without authority, and the petitioner should participate in those proceedings. The petitioner was granted the option to utilize Section 130(2) of the GST Act for seeking the release of goods during the confiscation proceedings. The Court dismissed the writ petition, allowing the petitioner to resort to Section 130(2) of the GST Act while the proceedings were ongoing.