2020 (3) TMI 134 - HC - GST

Levy of penalty - confiscated goods alongwith the vehicle have already been released upon payment of taxes- clause (a) of Sub-section (1) of Section 129 of the GGST/ CGST Act - HELD THAT - The writ applicant availed the benefit of the interm order passed by this court and got the vehicle along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It is now for the applicant to make good his case that the show cause notice, issued in GSTMOV-10, deserves to be discharged - Application disposed off.

Summary

Issues:
1. Release of goods and vehicle on payment of applicable tax and penalty under Section 129 of GGST/CGST Act.
2. Validity of show cause notice under Section 130 of Central Goods and Services Act, 2017.
3. Interpretation of provisions related to detention, seizure, and confiscation of goods and conveyances.

Analysis:
1. The writ applicant sought relief through a Writ Application under Article 226 of the Constitution of India, requesting the release of goods and vehicle upon payment of tax and penalty as per Section 129 of GGST/CGST Act. The applicant had already availed the benefit of an interim order for release upon payment of tax. The proceedings were at the show cause notice stage under Section 130 of the Act, indicating that further proceedings would follow as per the law. The judgment highlighted the importance of examining contraventions closely to determine intent to evade tax before invoking confiscation provisions.

2. The Court referenced a previous judgment to emphasize the necessity of a strong case before issuing a notice of confiscation under Section 130 of the Act. It stressed that authorities must assess contraventions and intent to evade tax with care, not resorting to confiscation notices without proper grounds. The judgment clarified that confiscation is a penal action aimed at deterring tax evasion, requiring a genuine belief supported by substantial reasons. The Court outlined the significance of recording reasons for invoking Section 130 at the detention stage and the need for material backing such decisions.

3. The judgment highlighted the independent nature of Section 130 concerning confiscation, emphasizing that not all contraventions automatically warrant confiscation. It underscored that confiscation should be based on a genuine belief of tax evasion, supported by solid reasons. The Court cautioned against issuing confiscation notices without proper examination or foundation, as it could render other provisions, like Section 129, ineffective. The judgment stressed the importance of good faith actions by authorities and the necessity of intense application of mind before invoking confiscation provisions.

In conclusion, the judgment disposed of the writ application, making the rule absolute to the extent mentioned, leaving it to the applicant to establish the discharge of the show cause notice issued under GSTMOV-10. The analysis underscores the Court's emphasis on careful assessment of contraventions and intent to evade tax before resorting to confiscation actions, ensuring a fair and lawful process in matters related to detention, seizure, and confiscation of goods and conveyances under the GST laws.