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of <h1>High Court quashes detention order & notice under CGST Act, emphasizes need for substantive grounds</h1> The High Court ruled in favor of the writ applicant, quashing the detention order under Section 129(1) of the CGST Act and the Show Cause Notice under ... Detention of goods alongwith vehicle - demand based on assumptions - E-way bill generated was valid for the period between 08.09.2020 and 13.09.2020 - HELD THAT:- The ground on which the authority proposes to confiscate the goods and the vehicle is not tenable in law. The show cause notice appears to have been issued on an assumption that the driver of the vehicle might have indulged in the past in contravention of the provisions of the Act and the Rules made thereunder. It appears the entire basis for the issue of the show cause notice is conjectures and surmises. The goods and the vehicle can be detained under Section 129 of the Act only if such goods are transported in contravention of the provisions of the Act or the Rules made thereunder - The show cause notice under Section 130 of the Act cannot be issued on a mere suspicion. There has to be some prima facie material on the basis of which the authority may arrive at the satisfaction that the goods are liable to be confiscated under Section 130 of the Act. Application allowed. Issues:1. Validity of detention order under Section 129(1) of the CGST Act2. Validity of Show Cause Notice under Section 130 of the CGST Act3. Request for release of conveyance and goods4. Allegations of contraventions in the show cause notice5. Legal basis for confiscation of goods and vehicle6. Requirement of prima facie material for issuing notice under Section 130Analysis:1. The writ applicant sought relief to quash the Order and Detention under Section 129(1) of the CGST Act and the Show Cause Notice under Section 130 of the CGST Act. The applicant, engaged in trading of pan masala, had ordered goods worth &8377; 35,74,155 from a supplier in Madhya Pradesh. The vehicle carrying the goods was intercepted, and a detention order was issued on 13th September 2020, followed by a Show Cause Notice on 15th September 2020.2. The High Court examined the contraventions mentioned in the show cause notice, which alleged discrepancies in the transportation of goods. The court noted that the basis for confiscation of goods and the vehicle seemed to rely on assumptions and conjectures, lacking concrete evidence of contravention of the Act or Rules.3. It was highlighted that under Section 129 of the Act, goods can only be detained if transported in contravention of the law. The court, after discussion with the Assistant Government Pleader, concluded that there was no apparent violation during the transit. The suspicion of tax evasion by the driver, as stated by the authorities, was deemed insufficient to justify the confiscation under Section 130 of the Act.4. The court emphasized that a mere suspicion is inadequate for issuing a notice under Section 130, requiring prima facie material to support the decision. Consequently, the High Court quashed the Show Cause Notice dated 15th September 2020, allowing the writ application. The judgment clarified that further inquiries could be conducted if necessary, based on concrete evidence.5. In conclusion, the High Court ruled in favor of the writ applicant, setting aside the show cause notice and emphasizing the necessity of substantive grounds for confiscation under the CGST Act. The judgment highlighted the importance of legal basis and prima facie material in such cases, ensuring fair treatment and adherence to the statutory provisions.
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