Court permits challenge to GST show cause notice under Section 130, stressing due process and intent requirements.

The court disposed of the writ application, allowing the writ applicant to challenge the show cause notice issued under Section 130 of the GST Act. Emphasizing the importance of due process, the court clarified that confiscation should only occur in cases demonstrating a clear intent to evade tax. The decision highlighted the distinction between Sections 129 and 130, ensuring that confiscation is not automatically invoked without proper justification. Authorities were reminded to record reasons and exercise caution before initiating confiscation proceedings, promoting fairness and adherence to the law.

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Issues Involved:
1. Confiscation of goods and conveyances under Section 130 of the GST Act.
2. Detention and release of goods under Section 129 of the GST Act.
3. Interim relief for the release of detained goods and vehicle.
4. Application of judicial precedent from Synergy Fertichem Pvt. Ltd v. State of Gujarat.

Detailed Analysis:

Confiscation of Goods and Conveyances under Section 130 of the GST Act:
The writ applicant sought relief against the notice issued by the respondent for confiscation of goods and conveyances and the levy of penalty under Section 130 of the GST Act. The court noted that the proceedings for confiscation were initiated directly under Section 130 without first considering the provisions of Section 129, which deals with detention and seizure. The court highlighted the importance of distinguishing between trivial and serious contraventions and emphasized that confiscation should only be considered when there is a clear intent to evade tax.

Detention and Release of Goods under Section 129 of the GST Act:
The court observed that the vehicle carrying the sonography machine was intercepted, and the driver failed to produce the e-way bill, leading to the seizure of the vehicle and goods. The writ applicant had already deposited Rs. 3,32,144 towards tax and penalty. The court directed the release of the sonography machine, considering that it had been detained for over a month and the tax and penalty had been paid. The court emphasized that the provisions of Section 129 should not be rendered insignificant by the premature invocation of Section 130.

Interim Relief for the Release of Detained Goods and Vehicle:
The court had previously granted interim relief directing the release of the detained goods and vehicle upon payment of the tax amount. The writ applicant availed this benefit and secured the release of the goods and vehicle. The court reiterated that the proceedings should continue in accordance with the law, and the writ applicant could challenge the show cause notice issued under Section 130.

Application of Judicial Precedent from Synergy Fertichem Pvt. Ltd v. State of Gujarat:
The court referenced its earlier judgment in Synergy Fertichem Pvt. Ltd v. State of Gujarat, which dealt with the application of Sections 129 and 130 of the GST Act. The court noted that authorities should not automatically invoke Section 130 at the time of detention and seizure without a clear indication of intent to evade tax. The court emphasized the need for authorities to record reasons in writing and for superior authorities to review such decisions to ensure they are justified. The court stated that not all contraventions warrant confiscation and that the action must be taken in good faith.

Conclusion:
The court disposed of the writ application, making the rule absolute to the extent that the writ applicant could challenge the show cause notice issued under Section 130. The court underscored the importance of due process and the need for authorities to apply their minds before initiating confiscation proceedings. The court's decision provided clarity on the application of Sections 129 and 130 of the GST Act, ensuring that confiscation is reserved for cases with a clear intent to evade tax.

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