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TMI Blog2020 (2) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (annexed at Annexure B); B. This Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order directing the learned Respondent authorities to forthwith release truck no.GJ-03 AT 1362 along with the goods contained therein; C. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to stay operation of the impugned detention / confiscation orders (annexed at Annexure A/B) and this Hon'ble Court may be pleased to further direct the learned Respondent authorities to forthwith release truck no.GJ-03 AT 1362 along with the goods contained therein; D. Ex parte ad interm relief in terms of prayer C may kindly be granted; E. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray." 3. On 26th June, 2019, a Co-ordinate Bench of this Court passed the following order: "Let notice be issued to the respondents, returnable on 24th July 2019. Ms.Mehta, the learned AGP waives service of notice for and on behalf of the respondents - State. Having heard th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners invited the attention of the court to the provisions of sections 129 and 130 of the Central Goods and Services Tax Act, 2017, to point out the procedure which is required to be followed by the respondent authorities in case where any goods are in transit in contravention of the provision of the Act or the rules made thereunder. It was pointed out that firstly, under section 129 of the Act, the officer is required to issue a notice as contemplated under subsection (3) thereof and thereafter, after affording an opportunity of hearing to the person concerned, pass an order thereunder. It was submitted that it is only if there is no compliance of the order passed under section 129 of the Act, that the provisions of section 130 of the IGST Act can be resorted to. The attention of the court was invited to the impugned show-cause notice dated 1.3.2019, to submit that the same seeks to impose penalty, redemption fine and confiscation under section 130 of the Act without initiating any proceedings under section 129 of the Act, which is not permissible in law. It was further submitted that the integrated goods and services tax has already been paid on the goods in question at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby directed to forthwith release the goods in question and the Truck bearing registration no. GJ-07UU-7250 detained/seized under purported exercise of powers under sections 129 and 130 of the CGST Act. However, the petitioner shall file an undertaking before this Court within a week from today to the effect that in case the petitioner, ultimately, does not succeed in the petition, he shall duly cooperate in the further proceedings. 7. Stand over to 27.03.2019, so as to enable the respondents to file affidavit-in-reply, if any, in the matter. Direct service is permitted today." The vehicle bearing registration no.GJ-03-AT-1362 as well as the goods, I.e. betel nuts, detained/seized under purported exercise of powers under Sections 129 and 130 of the GST Act shall be released immediately upon the writ-applicant depositing the amount of Rs. 2,08,250=00 with the concerned department. The writ-applicant shall file an undertaking before this Court within a week from today to the effect that in case the writ-applicant ultimately does not succeed in the petition, he shall duly cooperate in the further proceedings. Post this matter for further hearing on 24th July 2019. Direct ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to insignificance. The reason why we are saying so is that for the purpose of release of the goods and conveyance detained while in transit for the contravention of the provisions of the Act or the rules, the section provides for release of such goods and conveyance on payment of the applicable tax and penalty or upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) to Clause (1) of Section 129. Section 129(2) also provides that the provisions of sub-section (6) of Section 67 shall mutatis mutandis apply for detention and seizure of goods and conveyances. We quote Section 67(6) as under; "67(6) The goods so seized under sub-section(2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be." 100. Section 129 further provides that the proper officer, detaining or seizing the goods or conveyances, is obliged to issue a notice, specifying the tax and penalty payable and, thereafter, pass an order for payment of such tax and penalty. Clause (4) provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The authenticity of the delivery challan is also not doubted. In such a situation, it would be too much for the authorities to straightway jump to the conclusion that the case is one of confiscation, I.e, the case is of intent to evade payment of tax. 103. We take notice of the fact that practically in all cases, after the detention and seizure of the goods and the conveyance, straightway notice is issued under Section 130, and in the said notice, one would find a parrot like chantation " as the goods were being transported without any valid documents, it is presumed that the goods were being transported for the purposes of evading the tax". We have also come across notices of confiscation, wherein it has been stated that the the driver of the conveyance is presumed to have contravened the provisions of the Act or the Rules with an intent to evade payment of tax. This, in our opinion, is not justified. The resultant effect of such issue of confiscation notice at the very threshold, without any application of mind or without there being any foundation for the same, renders Section 129 of the Act practically otiose. We take cognizance of the fact that once the notice under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the owner of the goods as well as the owner of the conveyance to show-cause as to why the goods and the conveyance should not be confiscated under Section 130 of the Act. The notice for the purpose of confiscation must disclose the materials, upon which, the belief is formed. It could be argued that it is not necessary for the authority under the Act to state reasons for its belief. For the time being, we proceed on the basis of such argument. But, if it is challenged that the notice is bereft of the necessary details or the satisfaction of the authority is imaginary or based on mere suspicion, then the authority must disclose the materials, upon which, his belief was formed as it has been held by the Supreme Court in Sheonath Singh's case [AIR 1971 SC 2451]. In Sheonath Singh (supra), the Supreme Court held that the Court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court. The formation of the opinion by the authority that the goods and the conveyance are liable to be confiscated should reflect intense applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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