Interim relief granted for seized goods release after Section 130 show cause notice violated natural justice principles

The Gujarat HC granted interim relief to the petitioner seeking release of seized goods and conveyance. The court found violation of natural justice principles as a show cause notice under Section 130 was issued without awaiting petitioner's response. The court directed release of confiscated goods and conveyance subject to deposit of fine of Rs. 2,50,062 in lieu of vehicle confiscation, penalty of Rs. 5,00,124 under Section 129(1a), and bond value of Rs. 13,89,224 as per GST MOV-10. The court restrained respondents from taking coercive steps or passing further orders under Section 130 pending final adjudication. Application was allowed.

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Issues:
Petition seeking to quash notice under GST Act and release of seized goods.

Analysis:
The petitioner, a Limited Liability Partnership (LLP) Firm engaged in trading, sought to quash a notice issued under Section 130 of the GST Act and an order of detention under Section 129 for a truck carrying goods. The petitioner had ordered scrap iron from a supplier and provided all necessary documentation for transportation. However, the vehicle was intercepted, and despite no discrepancies found during physical verification, a detention order was issued. The petitioner argued that the notice under Section 130 was premature and not following due procedure under Section 129. The petitioner emphasized compliance with tax and penalty payments as required under Section 129 for release of goods. Additionally, the petitioner highlighted the amendment to Section 130, making Section 129 a special provision for detention and seizure, and argued that confiscation without seizure was not permissible.

The petitioner also pointed out procedural lapses in the inspection process, citing requirements for reports to be prepared and uploaded within specific timeframes, which were not followed. The petitioner relied on a circular to argue that if no discrepancies were found, the goods should have been released immediately, rather than being detained. The petitioner contended that the order of detention was issued on the same day as the show cause notice, without proper procedure, and challenged the invocation of Section 130 based on alleged discrepancies in the transaction. The petitioner sought writs to quash the impugned notices and orders, release of the truck and goods, interim relief, and any other just orders.

The Court heard arguments from both parties and directed interim relief pending final decision, requiring the petitioner to deposit fines and penalties in lieu of confiscation. The Court ordered the release of goods and conveyance upon compliance with specified conditions. The matter was tagged with another case for further consideration. The judgment addressed the core issue of challenging the detention and confiscation under the GST Act, providing interim relief while the case was pending further review.

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