2023 (1) TMI 842 - SC - GST

Vailidity of order of HC setting aside the SCN - Detention of goods alongwith the vehicle - allegation with respect to evasion of duty - levy of tax penalty and other charges - Section 130 of the Punjab GST Act 2017 and IGST Act 2017 and CGST Act 2017 - HELD THAT - From the notice dated 14.09.2021 it can be seen that the original writ petitioner was called upon to show cause within 14 days from the receipt of the said notice as to why the goods in question and the conveyance used to transport such goods shall not be confiscated under the provisions of Section 130 of the Punjab GST Act 2017 and IGST Act 2017 and CGST Act 2017 and why the tax penalty and other charges payable in respect of such goods and the conveyance shall not be payable. The High Court has materially erred in entertaining the writ petition against the show cause notice and quashing and setting aside the same. However at the same time the order passed by the High Court releasing the goods in question is not to be interfered with as it is reported that the goods have been released by the appropriate authority. The impugned judgment and order passed by the High Court is set aside to the extent quashing and setting aside the notice dated 14.09.2021 issued under Section 130 of the CGST Act and the matter remanded to the appropriate authority who issued the notice.

Summary

Issues:
Challenge to the High Court's decision setting aside the order of detention of goods/vehicle and notice under Section 130 of the CGST Act, 2017.

Analysis:
The Supreme Court granted leave to appeal against the High Court's judgment that set aside the detention order of goods/vehicle and the notice issued under Section 130 of the CGST Act, 2017. The High Court entertained the writ petition against the show cause notice, which called for a response within 14 days regarding the confiscation of goods and conveyance under various GST Acts. The High Court observed that there was no allegation of contravention of any provision of the Act or rules by the petitioner to evade tax. The case was related to a wrongful claim of input tax credit. The High Court's decision to quash the notice was considered premature as the evasion of tax was to be determined in the proceeding for which the notice was issued. However, the High Court's order releasing the goods was not interfered with as the goods had already been released by the appropriate authority.

The Supreme Court set aside the High Court's judgment to the extent that it quashed the notice under Section 130 of the CGST Act. The matter was remanded to the appropriate authority for the original writ petitioner to file a reply to the show cause notice within four weeks. The appropriate authority was directed to pass an order based on its own merits and in accordance with the law. All contentions/defenses available to the original writ petitioner were to be considered by the appropriate authority. The appeal was partly allowed, and no costs were imposed in the case. The Supreme Court refrained from expressing any opinion on the merits in favor of either party, leaving it to the appropriate authority to decide based on the facts and merits of the case.