2020 (6) TMI 623 - HC - GST

Release of detained goods alongwith conveyance - Section 130 of CGST Act - HELD THAT - We do not propose to go into the merits of the matter as we are of the view that we should allow the authority concerned to continue with the adjudication of the show cause notice issued under Section 130 of the Act. However, we are of the view that as the goods being groundnuts are perishable in nature, we should order release of the same along with the conveyance subject to certain terms and conditions pending the confiscation proceedings before the concerned authority. The writ applicant is directed to deposit an amount of ₹ 54,000/towards tax and penalty and the balance amount of ₹ 5,67,000/shall be by way of a bank guarantee of any nationalized bank. On deposit of ₹ 54,000/and furnishing of the bank guarantee of the balance amount, the authority concerned shall immediately release the goods as well as the conveyance - application disposed off.

Summary

Issues:
1. Seizure and detention of goods and conveyance during transit.
2. Notice for confiscation of goods and conveyance under Section 130 of the Act.
3. Legality and validity of the actions taken by the authority.
4. Release of perishable goods pending confiscation proceedings.

Analysis:

Issue 1: Seizure and detention of goods and conveyance during transit
The petitioner, a businessman engaged in trading agricultural products, had a consignment of groundnuts dispatched from Madhya Pradesh to Gujarat. However, on 2nd June 2020, the truck carrying the goods was intercepted by the respondent at Vasad due to discrepancies in the invoice and E-way bill. Consequently, the goods and the conveyance were seized and detained.

Issue 2: Notice for confiscation of goods and conveyance under Section 130 of the Act
The petitioner was served with a notice for confiscation of goods and conveyance in form GST MOV-10, with a total liability amounting to ?6,21,000. The notice also proposed the imposition of fines totaling ?5,40,000 along with additional penalties. The date for the show cause notice hearing was set for 19th June 2020.

Issue 3: Legality and validity of the actions taken by the authority
The counsel for the petitioner raised objections regarding the legality and validity of the actions taken by the authority, particularly questioning the issuance of the show cause notice under Section 130 of the Act. However, the court decided not to delve into the merits of the matter and allowed the authority to proceed with the adjudication process.

Issue 4: Release of perishable goods pending confiscation proceedings
Considering the perishable nature of the goods (groundnuts), the court ordered the immediate release of the goods and conveyance under certain conditions. The petitioner was directed to deposit ?54,000 towards tax and penalty, with the remaining amount of ?5,67,000 to be provided as a bank guarantee from a nationalized bank. Upon compliance with these conditions, the authority was instructed to release the goods and conveyance. The court clarified that the decision to release the goods did not imply a judgment on the merits of the case, and the confiscation proceedings would continue as per the law.

In conclusion, the writ application was disposed of with the directive for the release of the goods and conveyance, subject to the specified conditions, while allowing the confiscation proceedings to proceed independently.