Court quashes confiscation order, directs alternative procedure under GST Act. Bank guarantee required for goods clearance.

The court ruled in favor of the petitioners, quashing the confiscation order under Section 130 of the GST Act. The respondents were directed to proceed under Section 129(3) instead. The petitioners were allowed to clear the goods and vehicle upon furnishing a bank guarantee for tax and penalty amounts. A three-week grace period was granted for appellate remedies.

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Issues:
Detention of goods for defective documents, invocation of Section 130 of the GST Act, confiscation order challenged in writ petition.

Detention of Goods:
The petitioners, dealers in brass and copper scraps, faced detention of a consignment being transported from Coimbatore to Gujarat due to defective documents. The detention notice cited documents as the reason, despite the consignment having a tax invoice and e-way bill showing IGST payment and the transportation from Coimbatore to Gujarat. The respondents alleged the loading occurred in Palakkad, Kerala, not Coimbatore, justifying detention based on mismatched transportation details.

Confiscation Order under Section 130 of the GST Act:
The respondents invoked Section 130 of the GST Act, serving a notice on the petitioners and eventually passing an order of confiscation. The petitioners challenged this order, arguing against any intention to evade tax, especially as the consignment was legitimately destined for Gujarat, with IGST liability duly declared. The court found no evidence of tax evasion and quashed the confiscation order, directing the respondents to proceed under Section 129(3) of the GST Act instead.

Court's Decision:
The court ruled in favor of the petitioners, noting the lack of evidence suggesting tax evasion and the genuine declaration of the consignment's destination. The confiscation order under Section 130 of the GST Act was deemed legally unsustainable. The respondents were directed to issue orders under Section 129(3) after hearing the petitioners promptly. Additionally, the petitioners were allowed to clear the goods and vehicle upon furnishing a bank guarantee for determined tax and penalty amounts. A three-week grace period was granted post the final order under Section 129(3) to enable the petitioners to pursue appellate remedies if needed. The writ petition was disposed of with these directives for the respondents.

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