2020 (3) TMI 235 - HC - GST

High Court Orders Release of Seized Goods & Vehicle Under CGST Act

The High Court acknowledged the prima facie case made by the applicant regarding the detention and seizure of goods and a vehicle under Sections 129 and ... Release of detained goods and conveyance on payment of tax and penalty - detention and seizure under Section 129 of the Act, 2017 - confiscation under Section 130 of the Act, 2017 - intention to evade payment of tax as prerequisite for confiscation - requirement of recorded reasons for invoking confiscation at the threshold - perishable nature of goods as factor in ordering releaseRelease of detained goods and conveyance on payment of tax and penalty - perishable nature of goods as factor in ordering release - Direction for release of the detained vehicle and goods was justified and complied with upon payment of the tax amount specified in the impugned notice. - HELD THAT: - A co-ordinate Bench had recorded that the applicant trades in agricultural produce and that the goods (cumin) were perishable; taking into account the nature of contravention and the deposit of the tax and penalty amount determined by the authority, the Court directed the respondent to release the vehicle and the goods at the earliest. The writ applicant availed that interim order and obtained release of the vehicle and goods on payment of the tax amount. The proceedings on the show-cause notice under Section 130 remain pending and shall proceed in accordance with law. [Paras 2, 3, 4]Vehicle and goods released upon payment of the tax amount as directed; interim release complied with.Detention and seizure under Section 129 of the Act, 2017 - confiscation under Section 130 of the Act, 2017 - intention to evade payment of tax as prerequisite for confiscation - requirement of recorded reasons for invoking confiscation at the threshold - Validity of the show-cause notice in Form GST-MOV-10 was not finally adjudicated; the applicant may challenge the notice and is permitted to rely on the Court's observations in Synergy Fertichem Pvt. Ltd. regarding the threshold for invoking confiscation. - HELD THAT: - The Court observed the legal principle that not every contravention at the stage of detention and seizure warrants immediate invocation of Section 130; confiscation requires a strong case showing intent to evade tax and, if invoked at the threshold, the authority should record reasons and the material basis for its belief. The present show-cause notice was left open for the applicant to make good his case for its discharge; the confiscation proceedings remain pending and must proceed consistent with the legal standards indicated and in accordance with law. [Paras 6, 7]Show-cause notice under Form GST-MOV-10 left open for challenge; applicant permitted to rely on the Court's observations in Synergy Fertichem and to make good his case.Final Conclusion: Writ petition disposed; rule made absolute to the extent of directing release of the vehicle and goods on payment of the tax amount (which was effected); the confiscation proceedings under Section 130 remain pending and the applicant may challenge the show-cause notice and rely on the Court's stated principles regarding invocation of confiscation. Issues:1. Detention and seizure of goods and vehicle under Sections 129 and 130 of the Central Goods and Services Act, 2017.Analysis:The writ applicant filed a Writ-Application under Article 226 of the Constitution of India seeking relief against an impugned Notice and detention order issued by the respondent authorities. The Co-ordinate Bench of the High Court acknowledged the prima facie case made by the applicant, involving the trading of agricultural products and the interception of a truck carrying goods. The Court considered the perishable nature of the goods and the applicant's deposit towards tax and penalty, directing the immediate release of the vehicle and goods by the respondent No.2. The Court emphasized the need for authorities to closely examine contraventions of the Act or Rules and the intent to evade tax before invoking confiscation under Section 130. The judgment highlighted the importance of justifiable grounds and an application of mind by authorities before issuing confiscation notices, emphasizing that not all contraventions warrant confiscation. The Court referred to a previous case to support its stance on the necessity for a strong case to invoke Section 130 at the threshold of detention and seizure.The applicant benefited from the interim-order, securing the release of the vehicle and goods upon payment of the tax amount. The proceedings under Section 130 of the Act were at the show cause notice stage, indicating further legal steps to be taken in accordance with the law. The judgment allowed the applicant to challenge the show cause notice issued in Form GST-MOV-10, requiring the applicant to substantiate why the notice should be discharged. Ultimately, the writ application was disposed of, with the rule made absolute to the extent specified in the judgment. The detailed analysis provided insights into the legal considerations surrounding the detention and seizure of goods and vehicles under Sections 129 and 130 of the Act, emphasizing the need for authorities to exercise discretion and consider the circumstances before invoking confiscation provisions.