Aashiward Marketing Through Proprietor Saif Tanveer vs. State Of Gujarat

By this writ­application under Article 226 of the Constitution of India, the writ­applicant has prayed for the following relief(s):­ “15(A)   To   issue   writ   of   mandamus   or   any   other appropriate   writ,   order   or   direction,   directing to quash and set aside an order of Confiscation of Goods and Conveyance and demand of tax, fine and   penalty   issued   under   Form   GST   MOV­11   dated 21.10.2019 by respondent no.3 at Annexure­J. (B)     To   issue   writ   of   mandamus   or   any   other appropriate   writ,   order   or   direction,   directing to quash and set aside an order of detention of Goods   and   Conveyance   in   Form   GST   MOV­06   dated 06.09.2019 by respondent no.3 at Annexure­H. (C) To   issue   writ   of   mandamus   or   any   other appropriate   writ,   order   or   direction,   directing the respondents to release the seized goods along with   conveyance   under   Section   129(1)(a)   of   the Central Goods and Service Tax Act, 2017 on such terms and conditions which may be deemed fit and proper to this Hon'ble Court and in the interest of the petitioner. C/SCA/20931/2019 ORDER

The writ­applicant seeks to challenge the action of the respondents in declining to release the goods detained and seized under Section 129(1)(a) of the Central Goods and Service Tax Act, 2017 (for short the “Act”).

The   writ­applicant   claims   to   be   having GSTIN/Uni:   24AWWPT7235Q1ZB.   The   writ­applicant   is engaged   in   the   business   of   Arecanut   and   other agriculture and non­agriculture commodities.

It   is   the   case   of   the   writ­applicant   that   he purchased   a   consignment   of   Arecanut   worth Rs.68,00,000/­   from   a   firm   running   in   the   name   of Jaipuria Traders situated at Delhi. The details as regards   the   GST   Registration   etc.   of   the   Jaipuria Traders have been furnished in Paragraph No.4 of the memo of the writ­application.

According   to   the   writ­applicant,   Jaipuria Traders transported the goods in a vehicle for being delivered   at   the   place   of   the   writ­applicant.   The details of the goods and the requisite documents have C/SCA/20931/2019 ORDER been stated in the writ­application as under:­ Invoice No.& Date Bill of Landing/LR­ RR No. Invoice Value (In Rs.) Motor Conveyan ce No. E­Way Bill No. 34 01.09.2019 1355 01.09.2019 64,94,000 HR­38­y­ 9388 7610 9028 1833

While   the   goods   were   in   transit,   the   GST authorities   intercepted   the   vehicle,   detained   the same and the goods were accordingly seized along with the   conveyance.   It   is   also   the   case   of   the   writ­ applicant   that   the   driver   of   the   conveyance   had produced all the relevant documents relating to the goods and there was no contravention of any of the provisions of the Act or the Rules. It appears that the respondent no.3 issued a notice for confiscation of the goods, conveyance and levied of penalty under Section 130 of the Act.

We also take notice of the fact that the final order has been passed in FORM GST MOV­11, which is an order of confiscation of goods and conveyance and demand of tax, fine and penalty dated 21.10.2019. 8. Being   dissatisfied   with   the   order   of confiscation passed by the respondent no.3 in FORM GST MOV­11, the writ­applicant is before this Court with the present writ­application.

Mr.Chetan Pandya, the learned counsel appearing for the writ­applicant, has put forward the following submissions   to   make   good   his   case   that   the   writ­ C/SCA/20931/2019 ORDER application deserves to be allowed and the reliefs prayed for in the writ­application may be granted. The submissions are as under:­ “1. Under Rule 138A of the CGST Rules, the driver of   the   conveyance   is   required   to   carry   invoice   of bill   of   supply   or   delivery   challan   and   e­way   bill which was carried by the driver which was certified by   the   State   Tax   Officer   in     FORM   GST   MOV­01   on 04.09.2019. 2. Inspite   of   that   in     FORM   GST   MOV­02   on 04.09.2019,   same   officer   observed   that   documents tendered are defective and physical verification is required.

In physical verification in FORM GST MOV­04, no discrepancy was found between the goods loaded in the conveyance vis.a.vis invoice and e­way bill. Hence, as per Clause 2(g) of the Circular dated 13.04.2018 issued by the Board exercising powers under Section 168(1)   of   the   CGST,   conveyance   ought   to   have   been forth with released by passing an order in FORM GST MOV­05. 4. Instead of that, conveyance was detained in FORM GST   MOV­06   under   Section   129   of   the   CGST   on 06.09.2019. However, did not issue notice specifying tax and penalty payable in FORM GST MOV­07. 5. Straightway, notice issue  FORM GST MOV­10 under Section 130 of CGST asking the supplier and buyer to C/SCA/20931/2019 ORDER appear on 11.09.2019 and copy was delivered to the driver only.

An   order   in     FORM   GST   MOV­11   issued   on 21.10.2019 confiscating goods and conveyance and that order was sent by email to the supplier and buyer.

Under Section 129 of the CGST read with Circular dated   13.04.2018,   seizure   order   of   the   goods   and conveyance and notice in  FORM GST MOV­06 and  FORM GST MOV­07 ought to have been issued simultaneously. Because entire proceeding is to be completed within 14 days as per Section  129(6) of the CGST failing which   proceedings   under   Section   130   of   CGST   would start.

Once   actions   initiated   under   Section   129   of CGST, it has to be taken to its logical conclusion by issuance   of   notice   under   Section   129(3),   hearing under   Section   129(4)   and   conclusion   of   proceedings under Section 129(5) of CGST.

If   proceedings   under   Section   130   CGST   are proposed then after detention under  FORM GST MOV­02 and after physical verification under FORM GST MOV­04 straightway notice under Section  130 of CGST under FORM GST MOV­10 could have been issued.

Section  129  of  CGST  applies  only   where  any person transports any goods or stores any goods while they   are   in   transit.   This   Section   deals   with detention,   seizure   and   release   of   the   goods   and C/SCA/20931/2019 ORDER conveyance   in   transit.   Therefore,   detention   and seizure are two different actions. Once it is seized, further   process   of   release   is   mandatory   to   be followed.

Once the action of seizure under   FORM GST MOV­06 was not required as there was no discrepancy found during physical verification in FORM GST MOV­

Nothing  prevented  to the Department  to release the conveyance forthwith in FORM GST MOV­05 and then taking  appropriate actions  for the reason FORM GST MOV­06 and  FORM GST MOV­10 was issued.

In fact, while the goods and conveyance are in transit, it is the intention of the legislature that   goods   and   conveyance   must   go   on   and   entire procedure   under   Section   129   of   DGST   has   to   be completed within 14 days. With non obstinate clause, Section 129 is Code in itself and no appeal against any decision or order is maintainable and the tax and penalty paid under this Section shall not be able to available  for further  input  tax credit.  See Clause (I) of sub­section (5) of Section 17 of the CGST.

Sub­section of Section 107 of CGST does not say that on payment of amount under sub­section 6, goods   and   conveyance   can   be   released   whereas   sub­ section   11,   second   proviso   says   that   unless   the appellant is given show cause notice under Section 73 or Section 74 of CGST against the proposed order for payment   of   tax   i.e.   not   paid   or   short   paid   or erroneously refunded  or where input tax credit  has C/SCA/20931/2019 ORDER been   wrongly   availed   or   utilized,   no   order   can   be passed.

Admittedly, no show­cause notice is issued in the present matter either under Section 129(3) of the CGST under   FORM GST MOV­07 or under Section 73 or Section 74 of CGST.

The entire proceedings under Section 129 of CGST   are   envisaged   to   be   completed   within   14   days whereas   limitation   for   filing   appeal   under   Section 107 of CGST is there months and after further inquiry as   may   be   necessary,   the   appeal   is   to   be   decided within a period of one year.”

The   learned   advocate   appearing   for  the   writ­ On  the   other   hand,   this   writ­application  has been   vehemently   opposed   by   Mr.Soaham   Joshi,   the learned   Assistant   Government   Pleader   appearing   for the   respondents.   The   learned   AGP   has   raised   a preliminary objection with regard the maintainability of this writ­application on the ground that as the final   order   of   confiscation   has   been   passed,   the writ­applicant   should   prefer   an   application   under Section 107 of the Act. C/SCA/20931/2019 ORDER

According to the learned AGP, even otherwise, on   merits,   the   writ­applicant   has   no   case.   It   is submitted that most of the submissions canvassed on behalf of the writ­applicant, as referred to above, do not merit consideration.

The   learned  AGP   invited  the   attention   of  this Court to certain averments made in the affidavit­in­ reply filed on behalf of the respondent. The learned AGP placed strong reliance on the following averments made in Paragraph Nos.6 to 12 of the affidavit­in­ reply. “6. I say and submit that, the petitioner by way of this present petition has sought a writ of mandamus and/or  writ of certiorari or any other appropriate writ, order or direction, seeking direction to quash and set aside the order of confiscation of the goods and conveyance.  The petitioner has also sought  for quashment  of MOV­11 dated 21.10.2019 issued  by the respondent no.3. 7. I say and submit that the vehicle in question was stopped by the respondent authorities near Amirgadh Check Post and thereafter the authorities issued MOV­ 1 as well as MOV­2 on the very same  day  when  the vehicle   in   question   was   stopped   on   04.09.2019, thereafter,   the   authorities   issued   MOV­4   on 06.09.2019, wherein the goods in question were duly verify with the invoices, it is pertinent to mention that   MOV­4   pertains   to   only   verification   of   the C/SCA/20931/2019 ORDER quanitity of the goods with the invoices.

I   say   and   submit   that,   thereafter,   EWB­3   was uploaded   on   the   portal.   Hence,   prima   facie considering   the   invoices   and   the   E­way   Bills   in comparison   with   the   quantities   of   the   goods,   the authorities did not find any discrepancy at the very threshold, but, on 05.09.2019, a search was conducted on the business premises of the petitioner.

I   say   and   submit   that   the   said   search   dated 05.09.2019 was proposed in lieu of the fact that when the Mobile Squad had verified the invoices as well as E­way Bills of the petitioner and compared the same with   its   on   line   portal,   it   was   found   that   the petitioner in a short span had generated a seizable number  of E­way Bills. The petitioner had obtained the registration under the GST on 22.04.2019 and the on   line   portal   details   of   the   petitioner   which   is hereby placed on record which reveals number of E­way Bills. Hence, qua the petitioner, whose movement of goods is in cloud when the search was conducted in the business premises of the petitioner, it was found that no such business premises was in existence and the very said address given in the invoices was also incorrect.   Meaning   thereby,   as   mentioned   in   the invoices, there was no shop in the name of Aashirwad Marketing and a very vague address was given in the invoice (Annexure herewith and marked as ANNEXURE­R1 is   the   copy   of   the   search   report).   It   is   further required to be noted that the search report could not C/SCA/20931/2019 ORDER have been given to the petitioner as he was not found at the very given address.

I say and submit that, on the basis of the said search report, the deponent herein issued MOV­6 on the driver  of the vehicle  in question  which is duly received and the drive through what's up message on   Mobile   No.7017826127   had   sent   the   same   to   the seller of the goods in question, as per the invoices the goods have been transported from the New Delhi and the supplier was Jaypuriya Traders. It is further required to be noted that a detailed reasoning has been given in MOV­6 by the respondent  authorities. (Annexure herewith and marked as ANNEXURE­R­2 is the copy of MOV­6). It is further required to be noted that after issuance of MOV­6 to the driver it was forwarded to supplier Jaypuriya Traders by the driver himself till date no representation has been received from   the   petitioner   nor   the   supplier   to   prove   the genuineness of the transaction.

I   say   and   submit   that   even   the   present petition has been preferred through power of attorney holder   and   the   cause   title   of   the   petition   also reveals the very same address which is reflected in the   said   invoice   and   as   per   the   search   details Aashirwad Marketing is not having its office at “1st Floor,   325,   Nr.   Kazipur   Garden,   Opp.   Hathisinh Derasar, Shahibaugh, Ahmedabad.” And even the address of the power of attorney holder possesses the very same address. C/SCA/20931/2019 ORDER

I  say  and  submit   that  in  view  of  the  said facts,

In   such   circumstances,   referred   to   above,   the learned   AGP   prays   that   the   transaction   is   highly doubtful and it could be said that the intention was to evade the tax.

Having heard the learned counsel appearing for the parties and having gone through the materials on record   the   only   question   that   falls   for   our consideration   is,   whether   we   should   entertain   this writ­application   or   relegate   the   writ­applicant   to avail   of   the   alternative   remedy   of   preferring   a statutory appeal before the appellate authority under Section 107 of the Act.

Having regard to the facts of the present case, C/SCA/20931/2019 ORDER we   are   of   the   view   that   the   writ­applicant   should prefer an appeal under Section 107 of the Act before the concerned appellate authority. We would not like to express any opinion on the merits of any of the submissions.   We   expect   the   appellate   authority   to deal with each of the submissions canvassed on behalf of the writ­applicant, as commented above.

The   learned   advocate   appearing   for   the   writ­ applicant   makes   a   statement   that   his   client   shall prefer an appeal at the earliest.

We take notice of the fact that the period of limitation   is   on   the   verge   of   expiring.   In   such circumstances, the writ­applicant should act promptly within   a   period   of   15   days   from   the   date   of C/SCA/20931/2019 ORDER

We take notice of the fact that the goods and the   conveyance   came   to   be   seized   way   back   on 04.09.2019. It   has   been   almost   5   months.   In   such circumstance,   we   direct   the   appellate   authority   to give top priority to such appeal and decide the same. It goes without saying that the appellate authority shall   give   an   opportunity   of   hearing   to   the   writ­ applicant. We also direct the appellant authority to look   into   the   Circular   No.41/15/2018­GST   issued   by the Government of India, Ministry of Finance, dated 13.04.2018, in the form of instructions/guidelines.

Having   regard   to   the   provisions   of   law,   two appeals will have to be filed, one by the owner of the   goods   for   the   purpose   of   getting   the   goods released,   and   the   another   appeal   will   have   to   be filed by the owner of the vehicle whose vehicle has been detained and seized.

A copy of this order shall be made available to the   learned   AGP   Mr.Soaham   Joshi   for   its   onward communication. With   the   above,   the   writ­application   stands disposed of. Direct service is permitted. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) GIRISH