Kapil Hukmichand Kothari vs. Union Of INDIA

Facts

The petitioner, Kapil Hukmichand Kothari, engaged in trading copper and copper scrap, filed a petition challenging an Order of Detention under Section 129(1) of the CGST Act, issued by Respondent No. 4 on April 28, 2022, in Form GST MOV-06. The petitioner's goods, valued at Rs. 1,08,60,957/-, were being transported from Surat to Gandhinagar. The conveyance was intercepted on April 26, 2022, and despite the driver producing valid documents (invoice, E-way Bill, Lorry receipt), the goods were detained. Subsequently, a notice in Form GST MOV-10 under Section 130 of the CGST Act was issued on May 6, 2022. The petitioner argued that the detention was without jurisdiction and that the authority relied on past transactions for which no prior notices were issued.

Held

The Court decided to dispose of the petition without delving into the merits of the case, considering the ratio laid down in *Majid Bilalbhai Akbani Proprietor of M/S Imran Impex vs. State of Gujarat* and the statement made by the petitioner's counsel. The Court directed that upon the petitioner depositing an amount of Rs. 17 lacs and furnishing a bond of Rs. 65 lacs with the respondent-authority, the vehicle and goods in question shall be released. This release is to be without prejudice to the rights and contentions the petitioner may raise before the adjudicating authority in the pending proceedings under Form GST MOV-10. The inquiry with respect to Form GST MOV-10 shall proceed further in accordance with law. The Court did not expressly leave any issue undecided, but by disposing of the matter on the basis of the interim arrangement, it deferred a final determination on the merits of the detention and the subsequent proceedings.

Key Issues

1. Whether the Order of Detention under Section 129(1) of the CGST Act, issued in Form GST MOV-06, was passed without jurisdiction, particularly concerning the reliance on past transactions (2017-18 to 2020-21) for which no prior notices were issued, and whether the goods in transit were found to be in contravention of the Act or Rules. 2. Whether the subsequent notice in Form GST MOV-10, issued under Section 130 of the CGST Act, rendered the Section 129 proceedings non-maintainable. Petitioner's Arguments: - The authority exceeded its powers under Section 129 by relying on past transactions for which no notices were ever issued. - Section 129 only permits detention of goods in transit found in contravention of the Act or Rules, and no such contravention was found for the goods in transit. - Relied on the High Court's decision in *Majid Bilalbhai Akbani Proprietor of M/S Imran Impex vs. State of Gujarat* where goods were released on terms when a Section 130 notice was issued during Section 129 proceedings. - The petitioner is willing to deposit Rs. 17 lacs tentatively determined as penalty, subject to rights in adjudication proceedings. Revenue's Arguments: - The judgment records that the respondent-authorities filed an affidavit-in-reply, but does not detail their specific arguments.