2026 (3) TMI 1133 - HC - GST

Locus standi and writ restraint: challenge to GST confiscation notice refused where no bill-to-ship linkage and documentary discrepancies.

The HC rejected the petitioner's challenge to a GST confiscation show-cause notice on two principal grounds. First, the petitioner lacked locus standi ... Locus to challenge show-cause notice - confiscation in Form GST MOV-10 relating to the intercepted consignment - bogus and suspicious transactions - intention to evade tax - discrepancy in the documentation of the goods​​​​​​​ - premature judicial interference. Locus to challenge show-cause notice - HELD THAT: - The Court found serious doubt as to the petitioner's nexus with the intercepted consignment because the E-way bill showed dispatch from Maharashtra-Pune and a recipient in Gujarat, the petitioner is registered in Delhi, and the transaction was not a 'Bill to Ship' transaction. The affidavit-in-reply and record indicated neither supplier, recipient nor transporter had sought release. On this basis the Court concluded that the petitioner lacked sufficient locus to maintain the writ petition and that this ground alone justified dismissal. [Paras 8, 9] Petition dismissed for want of locus to challenge the impugned notice and related detention/confiscation proceedings. Interference with show-cause notice under Section 130 - HELD THAT: - The Court declined to disturb the show-cause notice. It relied on the Apex Court's observation in The State of Punjab v. Shiv Enterprises & Ors. [2023 (1) TMI 842 - SUPREME COURT] that it is premature for a High Court to decide on evasion of tax when such questions are to be considered in appropriate proceedings under Section 130. The Court also observed that the record manifested discrepancies and indicia of deceptive documentation (including issues as to E-way bill particulars and registration), and therefore refrained from quashing the notice. [Paras 10] No interference with the show-cause notice; the challenge to Form GST MOV-10 is dismissed. Final Conclusion: The writ petition is dismissed: the petitioner lacks locus to challenge the impugned detention/confiscation proceedings and, on the material before the Court and in view of precedent, the Court refrains from interfering with the show-cause notice issued under Section 130. Issues: (i) Whether the petitioner has locus standi to challenge the show-cause notice proposing confiscation in Form GST MOV-10 relating to the intercepted consignment; (ii) Whether the writ court should interfere with the show-cause notice under Section 130 of the Gujarat Goods and Services Tax Act, 2017 proposing confiscation, on the factual matrix presented.Issue (i): Whether the petitioner has locus standi to challenge the show-cause notice proposing confiscation in Form GST MOV-10 relating to the intercepted consignment.Analysis: The impugned documents show dispatch from Maharashtra and delivery in Gujarat and are not bill-to-ship transactions linking the petitioner, who is registered in a different jurisdiction, to the consignment as supplier, recipient, or transporter. The material on record raises doubt as to whether the petitioner is directly connected to the goods or the conveyance, and no attempt by the supplier, recipient, or transporter to seek release is recorded. Where the connection between the petitioner and the intercepted movement is not established by supporting statutory documents or by the E-way bill showing bill-to-ship linkage, the petitioner's standing to challenge confiscation proceedings is weak.Conclusion: The petitioner does not have locus standi to sustain the challenge to the show-cause notice; this conclusion is adverse to the petitioner and in favour of the revenue.Issue (ii): Whether the writ court should interfere with the show-cause notice under Section 130 of the Gujarat Goods and Services Tax Act, 2017 proposing confiscation, on the factual matrix presented.Analysis: The impugned notice invokes confiscation grounds under Section 130(1) where document irregularities, mismatch in transaction particulars, and indicia of evasion are alleged. Precedent establishes that writ interference with a show-cause notice under Section 130 is inappropriate where the notice is issued to investigate evasion and where factual materials disclose possible forged or deceptive documentation, absence of proper dealer particulars, or similar indicia of intent to evade tax. The record contains discrepancies in e-way bill particulars and other documentary materials that raise serious doubts about the movement and the transaction, justifying adjudicatory proceedings under the statute rather than preemptive writ relief.Conclusion: Interference with the show-cause notice is not warranted on the record; this conclusion is adverse to the petitioner and in favour of the revenue.Final Conclusion: The petition challenging the show-cause notice is without merit on both standing and substance and is dismissed, leaving the statutory confiscation proceedings to be adjudicated by the prescribed authority.Ratio Decidendi: Where the petitioner lacks a direct statutory connection to an intercepted consignment and the material discloses documentary discrepancies or indicia of evasion, writ jurisdiction should not be exercised to quash a show-cause notice under Section 130 of the Gujarat Goods and Services Tax Act, 2017; such matters are to be decided in the statutory adjudication process.