2019 (10) TMI 480 - HC - GST

Court directs release of detained conveyance under Central Goods and Services Tax Act

The court ruled in favor of the petitioner, directing the release of the detained conveyance and its contents. The judgment emphasized the significance of ... Detention of conveyance - no report of physical verification in Form GST MOV-04 has been served upon the petitioner till date - case of petitioner is that without preparing a report of physical verification in Form GST MOV-03 and Form GST MOVPage 04, the officer concerned has straightaway issued an order of detention in Form GST MOV-06. HELD THAT:- Having regard to the fact that the person in charge of the conveyance had produced the e-way bill as well as the invoice, the only ground on which the conveyance could have been detained was in case any discrepancies were found in the inspection of the goods and conveyance - However, in the facts of the present case after detaining the vehicle, no physical verification report has been submitted by the concerned officer and uploaded in the common portal, though required in accordance with the instructions issued by the Board. Under the circumstances, the order of detention under section 129 of the CGST Act, prima facie, is not sustainable. Issue rule, returnable on 24.10.2019. Issues involved:1. Interpretation of Circular No.41/15/2018-GST and Circular No.64/38/2018-GST regarding the procedure for inspection and detention of goods under the Central Goods and Services Tax Act, 2017.2. Compliance with the procedural requirements outlined in the circulars for physical verification and inspection of goods and conveyance.3. Validity of the detention order issued under section 129 of the CGST Act without following the prescribed procedure.Analysis:Issue 1: Interpretation of CircularsThe petitioner relied on Circular No.41/15/2018-GST, emphasizing the requirement for the proper officer to conclude inspection proceedings within three days of issuing Form GST MOV-02, and to issue a release order if no discrepancies are found. The petitioner argued that no discrepancies were identified, necessitating the release of the conveyance. Reference was also made to Circular No.64/38/2018-GST, stating that if goods are accompanied by the necessary documents, proceedings under section 129 of the CGST Act should not be initiated. The absence of discrepancies in the invoice and e-way bill was highlighted to support the contention that detention was unwarranted.Issue 2: Compliance with Procedural RequirementsThe petitioner contended that the proper officer failed to follow the prescribed procedure outlined in the circulars. While the person in charge of the conveyance produced the required documents, no reports of physical verification were served or uploaded on the common portal as mandated. The petitioner argued that the officer directly issued an order of detention without adhering to the procedural steps, indicating non-compliance with the circular's provisions.Issue 3: Validity of Detention OrderThe Assistant Government Pleader acknowledged the absence of reports post-verification, indicating non-compliance with legal provisions and circular instructions. The court observed that since no discrepancies were found after detaining the vehicle and no physical verification report was submitted, the detention order under section 129 of the CGST Act lacked sustainability. Consequently, the court directed the release of the conveyance and its contents, considering the procedural lapses and absence of grounds for detention.In conclusion, the judgment underscores the importance of adhering to procedural requirements outlined in circulars governing the inspection and detention of goods under the CGST Act. Non-compliance with these procedures can render detention orders unsustainable, as evidenced in this case where the absence of discrepancies and procedural lapses led to the release of the detained conveyance.