2020 (3) TMI 410 - HC - GST

Release of seized goods alongwith conveyance - return of amount which has been extorted under pressure - section 129 and 130 of CGST Act - HELD THAT - While issuing notice, this Court directed that the vehicle as well as the goods be released, upon payment of the tax, in terms of the impugned notice - The writ applicant availed the benefit of the interimorder 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 Section130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT 2020 (2) TMI 1159 - GUJARAT HIGH COURT . It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - Writ application disposed off.

Summary

Issues Involved:
Challenge to detention order, show cause notice, stay implementation, release of goods, return of extorted amount, interpretation of Sections 129 and 130 of Central Goods and Services Act, 2017.

Detailed Analysis:

1. Challenge to Detention Order and Show Cause Notice:
The petitioner sought to quash and set aside the detention order and show cause notice issued by Respondent No. 2. The High Court noted a previous order directing the release of goods and conveyance upon payment of tax. The petitioner availed this benefit and got the goods released. The proceedings were at the show cause notice stage under Section 130 of the Act. The Court emphasized the need for the authorities to closely examine the nature of contraventions and intent to evade tax before issuing confiscation notices under Section 130.

2. Interpretation of Sections 129 and 130 of the Act:
The Court referenced a judgment highlighting the importance of proper examination of contraventions at the detention stage. It stressed that not all contraventions automatically warrant confiscation under Section 130. The authorities must establish a strong case with justifiable reasons before invoking Section 130 at the outset. The judgment emphasized that confiscation is a penal action and should be based on solid grounds, not mere suspicion. The notice for confiscation must disclose the materials forming the basis of belief, ensuring actions are in good faith.

3. Stay Implementation and Release of Goods:
The Court disposed of the writ application after noting the applicant's need to justify the show cause notice for discharge. It made the rule absolute to the extent mentioned, indicating that the applicant needed to present a strong case for discharge of the show cause notice. The judgment highlighted the importance of fair and justifiable actions by authorities in cases of contraventions under the Act, emphasizing the need for proper examination and reasoning before invoking confiscation provisions.

In conclusion, the judgment focused on the procedural and substantive aspects of detentions and confiscations under the Central Goods and Services Act, emphasizing the need for authorities to act in good faith, with proper examination and justification before initiating confiscation proceedings.