2020 (4) TMI 551 - HC - GST

Release of detained goods - section 129 of GST Act - 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 - 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 GST-MOV- 6, deserves to be discharged - Application disposed off.

Summary

Issues:
- Release of truck and goods under Article 226 of the Constitution of India
- Interpretation of Sections 129 and 130 of the Central Goods and Services Act, 2017

Analysis:
1. The writ applicant sought relief for the release of a truck and its goods through a writ of mandamus or any appropriate order. The court noted a previous order directing release upon tax payment. The applicant availed this benefit and had the vehicle and goods released, with proceedings under Section 129 ongoing.

2. Reference was made to a recent judgment highlighting the authorities' need to closely examine contraventions of the Act or Rules during detention and seizure. The judgment emphasized that not all contraventions automatically warrant confiscation under Section 130, stressing the importance of intent to evade tax and the necessity for strong justifications before invoking Section 130 at the initial stage of detention.

3. The judgment outlined the procedural requirements under Sections 129 and 130, emphasizing the need for proper officer discretion, opportunity for the person concerned to be heard, and the consequences of non-payment within the specified period. It cautioned against issuing confiscation notices without sufficient grounds, as it renders Section 129 ineffective and leads to unjustified detentions.

4. The court clarified that while authorities can invoke Section 130 at the outset, they must establish a strong case with recorded reasons and materials supporting the belief of tax evasion. The judgment stressed the need for good faith actions, intense application of mind, and avoidance of arbitrary or baseless confiscations, highlighting the penal and deterrent nature of confiscation actions under Section 130.

5. Ultimately, the court disposed of the writ application, making the rule absolute to the extent mentioned, leaving it to the applicant to justify the discharge of the show cause notice under GST-MOV-6. The judgment underscored the importance of fair procedures, proper justifications, and lawful actions by authorities in cases of detention, seizure, and potential confiscation under the relevant provisions of the Act.