Gujarat HC grants partial relief allowing goods release while section 130 proceedings continue after finding arbitrary invocation without completing section 129 procedures

Gujarat HC allowed partial relief in goods seizure case. Court found petitioner's request for goods release reasonable, following precedent in Irshadbhai Hamidbhai Rain case. Authority's invocation of section 130 without completing section 129 procedures was deemed arbitrary. Court directed release of seized goods and vehicle subject to conditions including securing tax and penalty amounts, while section 130 proceedings would continue. Petitioner accepted compliance with imposed conditions similar to cited precedent.

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Issues involved:
The issues involved in the judgment are the challenge to two orders: one passed under section 129(2) of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017, and the other under section 130 of the Act resulting in the confiscation of goods.

Challenge to Order under Section 129:
The petitioner transported metal scrap from Pune to Gujarat, intercepted by authorities leading to orders under sections 129 and 130 of the Act. Section 129 deals with detention, seizure, and release of goods and conveyances in transit, providing conditions for release and penalties for non-compliance.

Challenge to Order under Section 130:
Section 130 relates to confiscation of goods or conveyances and levy of penalty, authorizing confiscation in cases of contravention of tax laws. The section outlines the process of adjudication, giving the owner the option to pay a fine in lieu of confiscation.

Arguments and Precedents:
The petitioner challenged the orders, claiming arbitrariness and illegal exercise of power, citing a precedent for the release of goods on certain conditions. The respondent argued that adjudicatory proceedings under section 130 must continue, emphasizing the need for due process.

Court's Decision and Directions:
The court found the petitioner's request for the release of goods reasonable, imposing conditions similar to a previous case for release. The court directed the continuation of proceedings under section 130, citing a Supreme Court decision on premature interference with notices. The judgment allowed the petition partly, directing the release of goods subject to specified conditions and the continuation of adjudicatory proceedings within a set timeframe.

Conclusion:
The judgment addressed the challenges to orders under sections 129 and 130 of the Act, balancing the release of goods with the need for adjudication. The court provided specific conditions for the release of goods while allowing the adjudicatory process to proceed in accordance with the law.

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