Rafiqbhai Mamadbhai Manakiya vs. State Of Gujarat

Facts

The petitioner, Rafiqbhai Mamadbhai Manakiya, filed a writ application seeking the release of his truck (GJ-03-AX-5727) and to quash a notice for confiscation of the conveyance. The truck was seized, and a notice under Section 130 of the CGST Act was issued. The petitioner argued that under the third proviso to Section 130(2), he should have the option to pay a fine equal to the tax payable on the goods in lieu of confiscation. The respondents disputed this, referring to the second proviso to Section 130(2) and Section 130(3). An interim order was passed directing the release of the truck upon payment of a fine of Rs. 62,024, which was to be treated as a deposit subject to the final outcome of the proceedings under Section 130.

Held

The Court noted that a final order of confiscation under Section 130 of the CGST Act, 2017, had been passed. Consequently, the Court relegated the writ applicant to challenge this final order by preferring an appeal before the appellate authority under Section 107 of the Act. Since the truck had already been released based on the interim order, the Court found no further adjudication was required in the present writ application. The Court clarified that it had not expressed any opinion on the merits of the case. The writ application was disposed of with liberty to the petitioner to prefer an appeal.

Key Issues

1. Whether the petitioner, as the owner of the conveyance used for carriage of goods for hire, is entitled to an option to pay a fine equal to the tax payable on the goods in lieu of confiscation of the conveyance, as per the third proviso to Section 130(2) of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the third proviso to Section 130(2) of the CGST Act, 2017, grants the owner of a conveyance used for hire the option to pay a fine equivalent to the tax on the transported goods, instead of the conveyance being confiscated. Revenue's contention: The revenue disputed this position by referring to the second proviso to Section 130(2) and sub-section (3) of Section 130 of the CGST Act, 2017, suggesting that the petitioner's interpretation might not be applicable or complete.