2022 (5) TMI 741 - HC - GST

Interim Relief Granted: CGST Section 130 Proceedings Stayed, Detained Goods Released Upon 1/4th Payment

Matrix Traders Versus Deputy Assistant Commissioner

The HC stayed proceedings based on a show cause notice under Section 130 of CGST Act and ordered release of detained goods upon payment of 1/4th of the ... Jurisdiction to issue SCN - Levy of tax - invocation of provisions of Sections 129 and 130 of CGST Act - HELD THAT:- When same issue came up for consideration before the Gujarat High Court, Division Bench of the Gujarat High Court in the case of M/S SHANTI METAL INDUSTRIES VERSUS STATE OF GUJARAT [2022 (4) TMI 508 - GUJARAT HIGH COURT], granted interim order subject to the petitioner therein depositing penalty and directed release of goods and conveyance. The issues raised in the present Writ Petition are required to be re-examined after filing counter by the respondents - there shall be stay of further proceedings pursuant to the impugned show cause notice dated 16.04.2022 and the subject goods and conveyance shall be released subject to the petitioner paying 1/4th of the amount proposed by the respondent authorities in the impugned show cause notice and on execution of personal bond for rest of the amount. Petition allowed by way of remand. Issues:Jurisdiction of authorities under Sections 129 and 130 of the Central Goods and Services Tax Act, 2017.Analysis:The petitioner's counsel argued that the action challenged in the Writ Petition was beyond jurisdiction, emphasizing that no tax should be imposed or collected without the authority of law as per Article 265 of the Constitution of India. It was contended that the 1st respondent acted without jurisdiction by invoking Section 130 of the Act. The counsel highlighted that recent amendments removed the 'Non-Obstente' Clause from Section 130, giving overriding effect to Section 129 from 01.02.2022. The counsel emphasized that Section 129 specifically deals with goods in transit and any penalties should be levied under this provision. Reference was made to the judgment of the Gujarat High Court in a similar case, supporting the argument that the legislative intent was to prevent the application of other provisions of the Act concerning goods in transit.The Government Pleader, representing the respondents, opposed the Writ Petition, asserting that the deletion of the 'Non-Obstente' Clause from Section 130 did not diminish the authorities' power to utilize this provision. It was argued that Sections 129 and 130 were independent, and the authorities were authorized to exercise their power under both provisions. The Government Pleader contended that accepting the petitioner's argument would render Section 130 redundant. Reference was made to a Gujarat High Court Division Bench interim order in a similar case where goods were released upon depositing the penalty.Considering the arguments presented, the High Court decided to stay further proceedings based on the impugned show cause notice and ordered the release of the goods and conveyance to the petitioner. The petitioner was directed to pay 1/4th of the proposed amount and execute a personal bond for the remaining sum. The issues raised in the Writ Petition were deemed to require re-examination after the respondents filed a counter.