2022 (6) TMI 603 - HC - GST

Seeking release of vehicle alongwith the goods - Section 129(1) of the CGST Act - trading of copper and copper scrap - Genuinness of transaction was under doubt - HELD THAT - It is not in dispute that when the conveyance was intercepted along with the goods, the driver of the conveyance did produce necessary documents which are required under the Act as well as the Rules like invoice, E-way bill, Lorry receipts. On depositing an the amount of Rs. 17 lacs and furnishing the bond of Rs. 65 lacs with the respondent-Authority, without prejudice to the rights and contentions to be raised before the adjudicating authority in the pending proceedings by the petitioner, the respondent-authority shall release the vehicle and goods in question. The inquiry with respect to Form GST MOV-10 shall proceed further in accordance with law. Petition allowed in part.

Summary

Issues Involved:
1. Legality of the Order of Detention under Section 129(1) of the CGST Act.
2. Validity of FORM MOV-10 issued under Section 130 of the CGST Act.
3. Release of detained goods and conveyance without payment of penalty.
4. Prohibition against further proceedings based on FORM MOV-10.

Issue-wise Detailed Analysis:

1. Legality of the Order of Detention under Section 129(1) of the CGST Act:
The petitioner challenged the Order of Detention dated 28/04/2022 issued in Form GST MOV-06 by Respondent No. 4 under Section 129(1) of the CGST Act. The petitioner argued that the authority exercised powers not vested in it, as no contravention of the Act or Rules was found during the transit of goods. The petitioner cited the case of Majid Bilalbhai Akbani to support their claim that such detention was non-maintainable and without jurisdiction.

2. Validity of FORM MOV-10 issued under Section 130 of the CGST Act:
The petitioner sought to quash FORM MOV-10 issued by Respondent No. 4 on 06.05.2022, arguing it was passed without jurisdiction. The petitioner contended that the authority relied on past transactions from 2017-2021, for which no notices had been issued previously. The petitioner was willing to deposit Rs. 17 lacs as a penalty and furnish a bond of Rs. 65 lacs, subject to rights and contentions in the adjudication proceedings under Section 130.

3. Release of detained goods and conveyance without payment of penalty:
The petitioner requested the release of goods worth Rs. 1,08,60,957/- and the conveyance without payment of penalty. The court noted that the driver produced necessary documents during the interception, and the reasons for detention in MOV-06 included discrepancies like mismatch between goods and documents, and issues with the validity of input tax credit. The court directed the release of the vehicle and goods upon depositing Rs. 17 lacs and furnishing a bond of Rs. 65 lacs.

4. Prohibition against further proceedings based on FORM MOV-10:
The petitioner sought a writ to permanently prohibit Respondent No. 4 from proceeding further pursuant to FORM MOV-10. The court decided to allow the inquiry with respect to FORM MOV-10 to proceed in accordance with law, without delving into the merits of the case.

Conclusion:
The court allowed the petition partly, directing the release of the detained vehicle and goods upon fulfilling the specified conditions. The inquiry related to FORM MOV-10 was permitted to continue as per legal procedures. The petition was disposed of with the observation that the rights and contentions of the petitioner would be preserved for adjudication proceedings.