Detention of goods and vehicle over alleged bogus supply chain u/s130; release allowed with 25% cash, bank guarantee

The dominant issue was whether goods and a vehicle detained under s.130 CGST/PGST Act should be released pending challenge to a confiscation order. The HC noted the authority's prima facie finding that the taxpayer's supply chain was ingenuine, involving bogus transactions and tax non-payment by upstream sellers, justifying safeguarding the revenue. Given the taxpayer was situated outside the State, the HC held surety bonds would be difficult to enforce and that revenue interests required stronger security. The writ was disposed of with liberty to challenge the MOV-11 order, and release was directed on payment of 25% of the demanded amount in cash and securing the balance by bank guarantee.

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Issues involved: Quashing of notice under GST Act, imposition of penalty and fine, validity of order, remedy available to petitioner, jurisdiction of the court.

Quashing of notice under GST Act:
The petitioner sought quashing of the notice in Form GST MOV-02 and Form GST MOV-10 passed by the respondent under Section 130 of the Central Goods Service Tax/Punjab Goods Service Tax Act, 2017, alleging it to be without jurisdiction.

Imposition of penalty and fine:
An order was passed to confiscate goods and vehicle, with penalty and fine imposed under Sections 130(1) and 130(2) of the Act, amounting to Rs. 5,33,004/- against the value of goods of Rs. 9,87,044/-.

Validity of order and available remedy:
The court noted that an appeal lies before the Appellate Authority against the order. Reference was made to a Supreme Court order accepting depositing 25% of the total amount by cash and furnishing a personal surety bond for the remaining amount.

Jurisdiction of the court:
Considering the petitioner's location in Uttar Pradesh, a finding was made that the supply chain was verified as ingenuine, involving bogus transactions to defraud the exchequer. The court held that depositing 25% of the amount by cash and furnishing a bank guarantee would secure the state's interest, in line with legal precedent.

Validity of order and remedy granted:
Citing legal precedent, the court disposed of the writ petition, allowing the petitioner to challenge the order dated 18.01.2024. The release of the vehicle and goods was conditioned upon furnishing 25% of the mentioned amount in the order and securing the balance with a bank guarantee. The court rejected the argument that a local consignee could furnish surety bonds, as the consignee was not present before the court.

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