2022 (12) TMI 592 - HC - GST

Seizure of goods in transit - the reason assigned in the Form GST MOV-06 for seizure of the goods that the purchaser firm was not in existence and it was a fake sale and invoice, is absolutely false - jurisdiction to proceed under Section 129(3) of the C.G.S.T Act 2017 - Notice issued in the name of Driver, despite the claim of the assessee HELD THAT - Noticing the said submissions, we may record that the dispute pertaining to validity of the seizure order cannot be seen at this stage for the findings returned therein in FORM GST MOV-07 appended at page-'36' of the paper book that the invoice was for fake sale. Moreover, the remedy before the petitioner is to approach the competent authority by moving a proper application giving details of his name about the ownership of the goods in question. The application which is appended as Annexure-'8' to the writ petition is undated and there is no proof of the receipt of the same in the office of the respondent no.2. We, therefore, dispose of the present petition with the observation that the petitioner shall approach the competent officer putting forth his claim of being owner of the seized good by a moving proper application along with the copy of this order

Issues:
1. Validity of seizure order under Section 129 of the C.G.S.T Act 2017.
2. Jurisdiction of the authority to proceed under Section 129(3) of the C.G.S.T Act 2017.
3. Notice under Section 129 issued in the name of the driver despite the petitioner's claim of ownership.
4. Requirement for the petitioner to approach the competent officer with a proper application regarding ownership of seized goods.

Analysis:

1. Validity of Seizure Order:
The petitioner, a registered dealer under the G.S.T Act engaged in supplying mixed scrap, challenged the seizure of goods during transit. The petitioner argued that the seizure was based on false grounds, as the goods were accompanied by a valid tax invoice and e-Way bill. The court noted that the dispute regarding the validity of the seizure order could not be determined at that stage, as the Form GST MOV-07 indicated a fake sale. The court directed the petitioner to approach the competent authority with a detailed application asserting ownership of the seized goods for further proceedings.

2. Jurisdiction under Section 129(3) of the C.G.S.T Act 2017:
The petitioner contended that the detention order was illegal, questioning the authority's jurisdiction to proceed under Section 129(3) of the C.G.S.T Act 2017. The court did not delve into the merits of this argument but directed the petitioner to submit a formal application to the competent officer regarding ownership of the seized goods. The court emphasized that all proceedings under Section 129 should involve giving the petitioner a fair opportunity to be heard.

3. Notice Issued in Driver's Name:
Despite the petitioner's claim of ownership submitted to the revenue department, a notice under Section 129 was issued in the driver's name. The court acknowledged the petitioner's contention that all proceedings under Section 129 should involve the petitioner after asserting ownership. The court directed the petitioner to file a proper application with the competent officer to address this discrepancy and ensure due process in the proceedings.

4. Requirement to Approach Competent Officer:
The court disposed of the petition with an instruction for the petitioner to approach the competent officer with a formal application asserting ownership of the seized goods. Emphasizing the need for due process, the court directed the competent officer to grant the petitioner an opportunity for a hearing in accordance with the provisions of Section 129(3) of the C.G.S.T Act 2017. The court clarified that its decision did not imply a judgment on the merits of the petitioner's claim.

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