Invalid detention order under CGST Act; show cause notice deemed unlawful. Interim relief granted for release of goods.

The court found that the detention order under Section 129 of the CGST Act was invalid as procedural requirements were not followed. The show cause notice issued under Section 130 was deemed unlawful due to lack of proper grounds, leading to the grant of interim relief for the release of detained goods and vehicle. Citing the Synergy Fertichem Pvt. Ltd. case, the court emphasized the need for authorities to justify invoking Section 130 with strong reasons. The writ application was disposed of, with interim relief granted and directions for further proceedings under the show cause notice.

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Issues Involved:
1. Validity of the detention order under Section 129 of the CGST Act.
2. Compliance with the procedural requirements under Sections 129 and 130 of the CGST Act.
3. Legality of the show cause notice issued under Section 130 of the CGST Act.
4. Interim relief for the release of detained goods and vehicle.
5. Application of the principles laid down in the Synergy Fertichem Pvt. Ltd. case.

Detailed Analysis:

1. Validity of the Detention Order under Section 129 of the CGST Act:
The respondents justified the detention of goods under Section 129(1) of the CGST Act due to the absence of an E-way bill during transit. The court noted that the proper officer must issue a notice specifying the tax and penalty payable and provide an opportunity for a hearing as per Section 129(3) and (4). The court found that the procedural requirements under Section 129 were not followed before issuing the show cause notice under Section 130.

2. Compliance with Procedural Requirements under Sections 129 and 130 of the CGST Act:
The court emphasized that the procedure under Section 129 must be followed before invoking Section 130. The show cause notice under Section 130 was issued without adhering to the requirements of Section 129, which prima facie appeared to be a procedural lapse. The court highlighted the necessity of issuing a notice under Section 129, specifying the tax and penalty, and providing an opportunity for a hearing before proceeding under Section 130.

3. Legality of the Show Cause Notice Issued under Section 130 of the CGST Act:
The court referred to its judgment in Synergy Fertichem Pvt. Ltd. v. State of Gujarat, underscoring that not all contraventions justify invoking Section 130 at the threshold. The court stressed that the authorities must closely examine the nature of the contravention and whether it indicates an intent to evade tax. The court found that issuing a notice under Section 130 without proper grounds renders Section 129 otiose and is not justified.

4. Interim Relief for the Release of Detained Goods and Vehicle:
The court granted interim relief by directing the respondents to release the detained goods and vehicle, considering the perishable nature of the goods and the procedural lapses in issuing the show cause notice under Section 130. The court required the petitioner to file an undertaking to cooperate in further proceedings if they do not succeed in the petition.

5. Application of Principles Laid Down in the Synergy Fertichem Pvt. Ltd. Case:
The court allowed the writ applicants to rely on the observations made in the Synergy Fertichem Pvt. Ltd. case, particularly paragraphs 99 to 104, which outline the proper approach for invoking Section 130. The court reiterated that authorities must make a strong case and record reasons for invoking Section 130 at the threshold, ensuring that the action is taken in good faith and not based on mere suspicion.

Conclusion:
The writ application was disposed of, making the rule absolute to the extent of the interim relief granted. The court directed that the proceedings under the show cause notice issued in GST-MOV-10 should continue in accordance with the law, allowing the writ applicants to contest the validity of the notice based on the principles established in the Synergy Fertichem Pvt. Ltd. case.

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