2020 (3) TMI 65 - HC - GST

Court makes rule absolute for applicant to substantiate case in GST-MOV-10, emphasizing good faith, avoiding unnecessary confiscations.

M/s MARUTI TRADERS THROUGH PROPRIETOR BINOD KUMAR SHAW THRU. AUTHORISED UMESHKUMAR SHIVKUMAR KHEMKA Versus STATE OF GUJARAT

The Court disposed of the writ application, making the rule absolute for the applicant to substantiate their case for the discharge of the show cause ... Confiscation of goods alongwith vehicle - imposition of penalty - HELD THAT:- While passing the aforesaid order, this Court directed that the vehicle as well as the goods be released, upon payment of the tax, subject to the writ applicant paying the tax and penalty as computed by the respondent authorities and also subject to filing a solemn undertaking before this court to the effect that the petitioner shall make good the deficit liability, if any, as may be determined finally by the authorities for the goods as well as for the vehicle/s subject to the petitioner's right to challenge the same in accordance with law. The writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law - It is now for the applicant to make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged. Application disposed off. Issues:Challenge to order of detention under Section 129(1) of the GST Act, confiscation of goods and conveyance, violation of principles of natural justice, interim relief for release of goods and conveyance, recent pronouncement of the Court in Synergy Fertichem Pvt.Ltd V/s. State of Gujarat.Analysis:The Writ Application challenged the order of detention under Section 129(1) of the GST Act, seeking the quashing of the order and notice for confiscation of goods and conveyance. The applicant requested a Writ of Mandamus or any appropriate writ to set aside the actions of the respondent as illegal, unlawful, and violative of natural justice and statutory provisions. An interim relief was sought for the release of goods and conveyance pending the final disposal of the petition.The Court referred to a previous order directing the release of detained goods upon payment of tax and penalty, subject to certain conditions including filing a solemn undertaking. The applicant availed this interim relief and got the vehicle and goods released by paying the tax amount. The proceedings were at the stage of a show cause notice under Section 130 of the Central Goods and Services Act, 2017, to proceed in accordance with the law.The Court acknowledged the recent judgment in Synergy Fertichem Pvt.Ltd V/s. State of Gujarat, emphasizing the need for authorities to closely examine the nature of contraventions and intent to evade tax before invoking Section 130 for confiscation. The judgment highlighted that not all contraventions automatically warrant confiscation and that invoking Section 130 at the threshold requires a strong case with recorded reasons. It emphasized the importance of good faith actions by authorities and the necessity for intense application of mind before confiscation.The Court disposed of the writ application, making the rule absolute to the extent that it was now for the applicant to substantiate their case for the discharge of the show cause notice issued in GST-MOV-10. The judgment reiterated the principles laid down in the recent case and emphasized the need for authorities to act in good faith and avoid unnecessary confiscations based on mere suspicion without proper grounds or reasons.This detailed analysis of the judgment showcases the Court's consideration of the applicant's challenges, the interim relief granted, and the application of legal principles outlined in a recent case to guide the proceedings related to the detention and confiscation of goods and conveyance under the GST Act.