M/S.Raja Traders vs. The State Tax Officer (GST)

Held

The Court disposed of the writ petition with specific directions, without expressing any opinion on the merits of the case. The Court directed that if the petitioner deposits a bank guarantee of Rs. 8,40,924/- before the respondents, their truck and material shall be released after obtaining photographs and fulfilling other formalities. The respondents were granted liberty to issue a notice to the petitioner as per Section 129(3) of the Act for the imposition of penalty. Furthermore, liberty was reserved to the respondents to proceed against the petitioner in accordance with law, and this order was not to impede their future actions. The Court did not decide on the legality of the detention order or the procedural irregularities alleged by the petitioner, focusing instead on facilitating the release of goods upon furnishing security.

Facts

The petitioner, M/s Rajl Traders, filed a writ petition challenging the detention order (Form GST MOV-06) and notice (Form GST MOV-07) issued by the 1st Respondent, the State Tax Officer (GST), on July 20, 2024. The goods, consisting of Scrap Lead Battery and Conveyance, were detained along with vehicle number CGO4 HY 6913, which was covered by a tax invoice and e-waybill. The petitioner contends that the detention order and notice were served only on July 23, 2024, and that the quantification of interest in the detention order was contrary to Section 129(3) of the CGST Act, 2017. The petitioner offered to deposit a bank guarantee of Rs. 8,40,924/- for the release of the goods and vehicle.

Key Issues

1. Whether the action of the 1st Respondent in passing the Detention Order in Form GST MOV-06 dated 20.07.2024 and issuing Notice in Form GST MOV-07 dated 20.07.2024, and serving the same only on 23.07.2024, for the detention of goods and conveyance is arbitrary, contrary to law, without jurisdiction, biased, frivolous, and in violation of Section 129 of the CGST/TSGST Acts, 2017, and Articles 14, 21, 265, and 300A of the Constitution of India. 2. Whether the quantification of interest in the detention order dated 20.07.2024 is contrary to the statutory mandate of Sub-Section 3 of Section 129 of the CGST Act, 2017. Petitioner's arguments: The petitioner argued that the detention order and notice were served with a delay, making the action arbitrary. They further contended that the quantification of interest in the detention order was contrary to the statutory requirement of providing a notice specifying the penalty payable at least 7 days prior, as per Section 129(3) of the CGST Act, 2017. The petitioner was willing to deposit a bank guarantee of Rs. 8,40,924/- for the release of the goods and vehicle. Respondents' arguments: The respondents' counsel submitted that liberty may be reserved to the department to issue a notice as per Sub-Section 3 of Section 129 of the Act for levying penalty on the petitioner.