TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 516
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.... even if goods and vehicles are seized in transit. 4. As these matters are to be disposed of on limited issue of alternative prayers made by the petitioners keeping the right of the petitioners open to challenge such order passed in Form MOV-11 under section 130 of the GST Act, with the consent of the learned advocates for the respective parties, the petitions were taken up for hearing to consider the issue as to whether during the pendency of the proceedings, the authority can exercise powers under section 67(6) and/or section 129(2) of the GST Act for provisional release of the goods and conveyance or not. 5. Learned advocate Mr. Uchit Sheth for the petitioners submitted that it is not in dispute that the goods and conveyance were accompanied by valid documents i.e. tax invoice and e-way bill and even then the goods were seized and notice for confiscation under Section 130 of the GST Act was issued on ground of alleged irregularities in the transactions of upstream vendors. 6. It was submitted that when the writ applicant applied for provisional release of goods under Section 67(6) of the GST Act pending confiscation proceedings, such application was rejected by impugned lette....
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....s is under Section 67(2) of the GST Act and if that be so, then plain language of Section 67(6) of the GST Act requires the authority to release the goods provisionally. 13. It was further submitted that Section 130 of the GST Act is the only statutory provision providing for confiscation of goods, whether goods are lying at the premises of the taxable persons or whether they are in transit and it is not disputed by the authorities that if goods seized at the premises of the taxable person which are liable for confiscation under Section 130 of the GST Act, then provisional release is permissible under Section 67(6) of the GST Act and if that be so and if there is a single provision for confiscation of goods, then it absolutely defies logic for the authorities to contend that provisional release is not permissible for goods seized during transit even though the provision under which they are allegedly liable for confiscation remains the same under section 130 of the GST Act. 14. It was submitted that such discriminatory policy based on the place from where goods are seized could never have been contemplated by the legislature and it is in fact contrary to the provisions and scheme....
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....penalty. It was submitted that insofar as the first option is concerned, the prescription of bond and security is under Rule 140(1) of the Central Goods and Services Tax Rules, 2017 (for short 'GST Rules'). 20. It was therefore, submitted that the bond is to be executed in Form GST INS-04 and security is to be given in the form of bank guarantee equivalent to the amount of applicable tax, interest and penalty if the first option is availed by the taxable person under Section 67(6). It was submitted that the second option is of payment of tax, interest and penalty and thus these are the statutory terms of provisional release and the authority does not have any discretion to alter such terms. It was submitted that if either of the options are exercised by the taxable person then the authority is bound to provisionally release the goods under Section 67(6) of the GST Act. 21. Learned advocate Mr. Sheth further submitted that once the goods are seized and if the taxable person applies for availing provisional release under Section 67(6), then the authority is required to forthwith allow such provisional release provided the taxable person immediately complies with the conditions for ....
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....ssed in Misc. Civil Application (For orders) No. 1 of 2021 in Special Civil Application No.1368/2021) 11) A.B. Traders v. State of Gujarat (order dated 24.12.2021 passed in Special Civil Application No.18393/2021) 12) Royal Impex v. State of Gujarat (order dated 9.03.2022 passed in Special Civil Application No.4904/2022) 24. On the other hand, learned Assistant Government Pleader Mr. Trupesh Kathiria for the respondents submitted that the respondents authorities is yet to adjudicate upon the show cause notice in Form MOV-10 issued under section 130 of the GST Act and therefore, the question of provisional release would not arise on plain reading of section 68 read with section 129 of the GST Act. 25. It was submitted that since supply of goods in these cases is in contravention of the law and is liable to be confiscated as well as to be considered as offences under sections 122(i)(ii)(vii) and (ix) as mentioned in notice in Form GST MOV 10, proceedings under section 130 have been initiated. 26. It was submitted that entire transaction chain of supply is established with intent to evade the taxes and hence invocation of section 130 of the GST Act was justified. 27. It was su....
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....things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice. (4) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. (5) The person from whose custody any documents are seized under sub-section (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking....
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....horised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier. 129. Detention, seizure and release of goods and conveyances in transit (AS it existed prior to amendment) (1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in trasit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released. (a) on payment of penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the ....
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....amendment) (1) [Where] any person- (i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122. (2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fi....
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....to be confiscated they are required to be seized for the purpose of invocation of section 130 of the GST Act. Therefore, in such circumstances, provisions of section 67(2) of the GST Act comes into play and seizure of goods under section 129 then becomes seizure under section 67 of the GST Act so as to confiscate the same under section 130 of the GST Act. 32. Reliance placed on behalf of the petitioners on decision in case of Western Components Ltd. (supra) is applicable in facts of the case in which it is held by the Apex Court that once the goods are seized and then released, confiscation is also permissible but if the goods are not seized then there cannot be any confiscation which is applied by the Bombay High Court in case of Commissioner of Customs (Import), Mumbai v. Finesse Creation Inc.(supra) and Punjab and Haryana High Court in case of Commissioner of Customs, Amritsar v. Raja Impex(P). Ltd. (supra). 33. In view of above analysis, once the notice in Form MOV-10 under section 130 for confiscation of goods is issued, the goods in question stand seized under section 67(2) of the GST Act, applicability of section 129 of the GST Act comes to an end. 34. In such circumstanc....
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....such quantum as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be. Therefore, as the petitioners are ready to either execute a bond and furnish the security in prescribed manner and/or make payment of applicable tax, interest and penalty, the respondents authorities were not justified in denying the provisional release of the goods and conveyance as it is mandatory for the authority to exercise powers under section 67 (6) of the GST Act for provisional release of the goods and conveyance as there is mandate by word "shall" provided under section 67(6) of the GST Act. The word "shall" ordinarily indicates that the provision is mandatory in nature and therefore, reliance placed by the petitioner in case of State of Haryana v. Raghubir Dayal reported in (1995) 1 Supreme Court Cases 133, Delhi Airtech Services Private Ltd. v. State of U.P. and others reported in (2011) 9 Supreme Court Cases 354 and in case of ALD Automotive Pvt. Ltd. v. Commercial Tax Officer reported in (2019) 12 Supreme Court Cases 225 would be applicable in facts of the case. 37. In view of the foregoing reasons, the respondents authorities are required to release t....