M/S.Vishal Arogya Sampath PVT. LTD. vs. Deputy Assistant Commissioner(St)

Held

The Court addressed the petitioner's prayer in two parts. Firstly, regarding the invalidation of confiscation proceedings and demand for tax and penalty, the Court held that the petitioner was not entitled to this relief. It was not pleaded that respondent No.1 lacked jurisdiction to initiate proceedings. The question of whether the consignment was supported by tax invoices was a matter to be decided in the proceedings initiated by respondent No.1, and the Court was not inclined to interdict those proceedings at that stage. Secondly, concerning the seizure of goods and the vehicle, which had been detained since October 27, 2017, the Court found that the ends of justice would be met by releasing them. This release was made conditional upon the petitioner depositing the tax component of Rs.2,22,612/-, excluding the penalty. This deposit would be subject to the final outcome of the proceedings pending before respondent No.1. The Court directed respondent No.1 to release the seized vehicle and goods upon the petitioner making the specified deposit.

Facts

The petitioner, M/s Vishal Arogya Sampath Private Limited, filed a writ petition seeking a mandamus to declare the confiscation proceedings initiated by the Deputy Assistant Commissioner (ST), Kurnool (respondent No.1) regarding a vehicle and its goods as illegal, and for the release of both. The petitioner stated that on October 26, 2017, they dispatched a consignment of Patanjali Ayurvedic Products from Hyderabad to Proddatur. The consignment was covered by a sale invoice and an e-way bill issued by the State of Telangana. On October 27, 2017, at Panchalingala, Andhra Pradesh, respondent No.1 stopped the vehicle (bearing registration No.AP 16 TJ 0413) and seized it along with the goods. Following the seizure, a detention notice and four notices proposing levy of tax and penalty under the CGST Act and APGST Act were issued. The petitioner was informed of a total tax liability of Rs.1,11,306/- under the CGST Act and Rs.1,11,306/- under the APGST Act, along with equal penalty amounts.

Key Issues

1. Whether the action of respondent No.1 in initiating confiscation proceedings and seizing the vehicle and goods is illegal, and if so, should the proceedings be invalidated and the seized items released? (This issue turns on the interpretation and application of provisions related to seizure and confiscation under the CGST Act and APGST Act, specifically concerning the validity of documentation accompanying the consignment). Petitioner's contentions: The entire action of seizing the goods and issuing show cause notices was arbitrary and illegal. The driver had presented the sale invoice and e-way bill to the detaining authority, yet the vehicle and goods were seized. Respondents' contentions: The driver of the vehicle failed to produce any statutory records, as evident from the impugned show cause notices.