Izaan Trading vs. State Of Gujarat

Facts

The petitioner, Sreejith K., proprietor of M/s. Sridev Traders, engaged in Areca Nut trading, placed an order for goods worth Rs. 63,70,000/- with a supplier, M/s. Izaan Trading, Karnataka. The goods were loaded into a conveyance (TN 70 Y 8229) with an e-way bill valid until 16.11.2021. The consignment was intercepted on 13.11.2021 at Navpura-Songadh Highway, Surat. The driver's statement was recorded, and Form GST-Mov-01 was issued, followed by Form GST-Mov-06 by respondent no. 3, alleging deficiencies. The matter was at the stage of Section 129 of the CGST Act. The petitioner, the buyer, had not been directly served notice. The supplier subsequently deposited Rs. 9,55,840/- towards tax and penalty.

Held

The Court directed respondent no. 3 to release the goods and the conveyance at the earliest, on or before February 28, 2022. The reasoning was that the supplier had already deposited the requisite amount towards tax and penalty, aggregating to Rs. 9,55,840/-. The Court acknowledged that the goods, being Areca Nuts, could be considered perishable. While the Court did not quash the detention order itself, it allowed the release of goods and conveyance, stating that the department could proceed with further inquiry in accordance with law. The Court also noted that if the department decided to issue a notice under Section 130 of the Act, the writ-applicant would be at liberty to question it before the appropriate forum. The issue of quashing the detention order was expressly left undecided, pending potential further action under Section 130.

Key Issues

1. Whether the undated order of detention under Section 129(1) of the CGST Act, issued by respondent no. 2, is liable to be quashed and set aside, and if the goods worth Rs. 63,70,000/- loaded in Conveyance No. TN 70 Y 8229 should be released without payment of tax and penalty, as argued by the petitioner. The petitioner contended that they, as the buyer, were not afforded an opportunity of being heard and came to know about the detention through the driver, with no notice issued to them. They sought the release of goods and conveyance. The respondent State argued through the AGP, but specific arguments regarding the detention order's validity or the release of goods were not detailed in the judgment. The Court noted that the supplier had already deposited the tax and penalty.