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TMI Blog2019 (10) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, therefore, cannot be sustained. The order dated 08.04.2019 issued by the third respondent under section 130 of the CGST Act as well as the order of demand of tax and penalty dated 29.01.2019, issued in Form GST MOV-09 are hereby quashed and set aside and the third respondent is directed to forthwith release the conveyance and goods in question - Petition allowed. - R/SPECIAL CIVIL APPLICATION NO. 16901 of 2019 - - - Dated:- 18-10-2019 - JUSTICE HARSHA DEVANI AND JUSTICE SANGEETA K. VISHEN For The Petitioner (s) : MR CHETAN K PANDYA (1973) For The Respondent (s) : ADVANCE COPY SERVED TO GOVERNMENT PLEADER/PP(99) And NOTICE SERVED BY DS(5) ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. Rule. Mr. Trupesh Kathiriya, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondents. 2. Having regard to the controversy involved in the matter as well as the urgency of the case, the matter was taken up for final hearing today. 3. By this petition under article 226 of the Constitution of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the tax and penalty as computed therein. Thereafter, a notice came to be issued in Form GST MOV-10 under section 130 of the CGST Act for confiscation of the conveyance and goods in question on the grounds that on a perusal of the details in bilty No.15615, it prima facie being disproportionate, the same required verification; and that upon primary examination of the dealer online, it is found that in December 2018, he has generated 42 e-way bills wherein IGST of ₹ 3,64,30,800/- is shown, and that it appears that either the dealer has not paid such amount or the purchases are not genuine. Thereafter, by the impugned order dated 08.04.2019, the goods and conveyance are ordered to be confiscated in exercise of powers under section 130 of the CGST Act. 5. Mr. Chetan Pandya, learned advocate for the petitioner assailed the impugned order by submitting that the documents which were required to be carried by the driver were duly produced at the time when the vehicle came to be intercepted. It was submitted that while Form GST MOV-02 was issued stating that physical verification of the goods is required to be carried out, however, no report in Part A of Form GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have purchased the goods which were being transported from parties located at Kolkata, West Bengal; however, upon verification by the GST Department, it was found that such parties are not in existence. It was submitted that, therefore, it appears that the petitioner has purchased the goods from the local market without paying any local tax and is selling the same to the dealers in New Delhi mentioning State tax in the invoice and thereby, claiming input tax credit. It was submitted that the authority under the GST Act had issued DRC-1 under section 74 of the GST Act on 25.04.2019 and the petitioner is facing prosecution for wrongfully availing the benefit of input tax credit and a charge-sheet has been filed against the petitioner on 05.10.2019 for the offence punishable under sections 132(1)(c) as well as 132(1)(d) of the GST Act. It was submitted that in the light of what has been unearthed during the course of investigation, the order of confiscation is justified. It was submitted that the petitioner has no other property except residential premises, the value whereof, is not commensurate with the amount involved in the entire fraud that has been committed by the petitioner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of three working days from the date of issue of the order in Form GST MOV-02, the proper officer shall conclude the inspection proceedings, either by himself or through any other proper officer authorized in this behalf and that, where the circumstances warrant such time to be extended, he shall obtain a written permission in Form GST MOV-03 from the Commissioner or an officer authorized by him for extension of time beyond three working days and a copy of the order of extension is required to be served on the person in charge of the conveyance. The circular further provides that on completion of physical verification/inspection of the conveyance and goods in movement, the proper officer shall prepare a report of such physical verification in Form GST MOV-04 and serve a copy of the said report to the person in charge of the goods and conveyance. The proper officer shall also record, on the common portal, the final report of the inspection in Part B of Form GST EWB-03 within three days of such physical verification/inspection. Thus, when the conveyance was detained for the purpose of inspection, it was incumbent upon the third respondent to prepare a report in Form GST EWB-03 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid ground for detention of the vehicle in question on the part of the respondents. Under the circumstances, the question of calling upon the petitioner to pay the tax, penalty and fine, as computed by the respondent in the order of demand of tax and penalty in Form GST MOV-09 dated 29.01.2019 does not arise. 7.4 Despite the aforesaid position, the third respondent has proceeded further and issued a notice under section 130 of the CGST Act in Form GST MOV 10, and has thereafter, passed an order of confiscation under section 130 of the Act in Form GST MOV-11. The reason for passing such an order has got nothing to do with the reasons for which, the goods and conveyance were initially detained. The reasons for issuance of the notice for confiscation under section 130 of the CGST Act in Form GST MOV-10 are that upon preliminary verification of the dealer online, 42 e-way bills have been generated in December 2018, wherein, IGST has been shown to ₹ 3,64,30,800/- and it appears that, dealers has not paid the same or that the purchases are not genuine. If that be so, nothing prevents the respondents from taking appropriate action against petitioner in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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