2022 (5) TMI 404 - HC - GST

Confiscation Challenge: Section 130 CGST Act Questions Seizure of Goods Despite Proper Documentation and No Opportunity for Tax Payment

NIKESH RAMESHBHAI SARVAIYA Versus STATE OF GUJARAT

The HC examined a challenge to a confiscation order under Section 130 of CGST Act. The applicant contested the authority's actions in seizing goods in ... Provisional release of goods - Seizer and detention of goods in transit - goods are accompanied by a lawful e-way bill, invoices - HELD THAT:- the additional facts which has emerged on record is that final order in FORM GST MOV-11 has been issued in the case of writ applicant vide order dated 19.01.2022, whereas the amendment has come into effect from 1.1.2022. Moreover, admittedly the writ applicant is not a registered dealer. This Court may not have entertain this petition solely on the ground of availability of efficacious alternative remedy under section 107 of the Act, 2017. However, since similar question of law has been raised, we direct this matter to be heard with Special Civil Application no. 7425 of 2022 and Special Civil Application no. 7426 of 2022. Issues:1. Challenge to confiscation order under Section 130 of CGST Act, 2017.2. Entitlement of the respondent authority to seize and detain goods in transit.3. Provisional release under Section 129 of the Act.4. Availability of efficacious alternative remedy under Section 107 of the Act.Issue 1: Challenge to Confiscation Order under Section 130 of CGST Act, 2017:The writ applicant sought writs to quash a Notice for Confiscation of Goods and Conveyance and levy of penalty under Section 130 of the CGST Act, 2017. The challenge was against the confiscation order dated 19.01.2022. The Court issued a notice to the respondents, returnable on 28.04.2022, and the matter was to be heard with another Special Civil Application. The legal submissions raised questioned the authority's actions regarding confiscation proceedings without offering the writ applicant an opportunity to deposit tax or penalty. The Court acknowledged the need to consider amendments made in various sections of the Act, 2017, after hearing both parties extensively.Issue 2: Entitlement to Seize and Detain Goods in Transit:The central issue was whether the respondent authority was justified in seizing and detaining goods in transit, along with the conveyance, especially when accompanied by a lawful e-way bill and invoices, without allowing the writ applicant to deposit any tax or penalty. Both parties raised significant legal issues concerning amendments in the Act, 2017. The Court highlighted the importance of determining if the authority's actions were justified under the law, particularly in the absence of an opportunity for the writ applicant to comply with any tax or penalty requirements.Issue 3: Provisional Release under Section 129 of the Act:Regarding the prayer for provisional release under Section 129 of the Act, the Court noted that this aspect needed to be examined in light of the relevant provisions, including sub-clause (3) of Section 129 and sub-clause (6) of Section 67 of the Act. The Court observed that the final order was issued before the amendment came into effect, and the writ applicant was not a registered dealer. Despite the availability of an alternative remedy under Section 107 of the Act, the Court decided to admit the matter due to similar legal questions raised in other applications. The Court reserved the decision on interim relief and set the next hearing date for further proceedings.Issue 4: Availability of Efficacious Alternative Remedy under Section 107 of the Act:Although an alternative remedy was available under Section 107 of the Act, the Court decided to admit the matter due to the similarity in legal issues raised in other applications. The Court emphasized the need to consider the interim relief based on the specific circumstances of the case and reserved the decision on this matter for the next hearing date.This detailed analysis of the judgment from the Gujarat High Court highlights the key legal issues raised by the writ applicant and the considerations made by the Court in addressing each of these issues comprehensively.