2020 (4) TMI 33 - HC - GST

Release of detained goods alongwith the truck - Section 129 of the Central Goods and Services Act 2017 - 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 129 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 2019 (12) TMI 1213 - GUJARAT HIGH COURT - It is now for the applicant to make good his case that the show cause notice issued in GSTMOV- 6 deserves to be discharged. Application disposed off.

Summary

Issues:
- Writ application under Article 226 of the Constitution of India seeking release of truck and goods
- Interpretation of Sections 129 and 130 of the Central Goods and Services Act, 2017
- Application of law regarding confiscation of goods and conveyances
- Examination of contravention of provisions of the Act or Rules

Analysis:
The writ applicant filed a Writ Application seeking the release of a truck and its goods. The Court noted a previous order directing release upon payment of tax. The applicant had availed this order and released the vehicle and goods by paying the tax. The proceedings were at the show cause notice stage under Section 129 of the Act, and the Court referred to a recent judgment for guidance. The judgment highlighted the importance of examining contraventions closely and determining intent to evade tax before invoking Section 130 for confiscation.

The judgment emphasized that not all contraventions automatically lead to confiscation under Section 130. It stressed the need for authorities to assess contraventions and intent meticulously. The Court provided examples where contraventions may not indicate intent to evade tax, such as missing documents despite other proofs being satisfactory. It cautioned against issuing confiscation notices without proper grounds, as it renders Section 129 ineffective and leads to unnecessary detention of goods and conveyances.

Furthermore, the judgment clarified that invoking Section 130 at the outset requires a strong case and detailed reasoning. Authorities must record reasons for their belief in writing, subject to review by superiors. The judgment highlighted the penal nature of confiscation and the need for authorities to act in good faith, avoiding mere suspicion. It emphasized that the notice for confiscation must disclose materials forming the basis of the belief, reflecting a genuine application of mind.

Ultimately, the Court disposed of the writ application, leaving it to the applicant to challenge the show cause notice issued. The judgment underscored the importance of authorities acting in good faith, with strong grounds and detailed reasoning when considering confiscation under Section 130, ensuring fair application of the law and preventing arbitrary actions.