Shree Ji Traders vs. Union Of INDIA

Held

The Court held that the proceedings under Section 130 of the CGST Act were still pending before the respondent authorities. Recognizing the petitioner's willingness to pay the tax and penalty under protest, the Court directed the release of the goods and the conveyance. The petitioner was ordered to deposit an amount of Rs. 51,084/-, as computed by the respondent in the notice issued under Section 130 of the CGST Act. This amount was to be treated as a deposit made under protest and would be subject to the final outcome of the proceedings under Section 130. The Court also preserved the petitioner's right to challenge any adverse order passed in those proceedings. The issue of the validity of the detention and confiscation proceedings under Sections 129 and 130 was not definitively decided, as the matter was remanded for final adjudication.

Facts

The petitioner, Shree Ji Traders, engaged in metal scrap trading, challenged an order of detention and a show-cause notice issued under the CGST Act. The petitioner's goods, valued at Rs. 45,436/-, were being transported from Rajasthan to Gujarat. During transit, the conveyance was intercepted, and the goods were detained as the driver did not possess the original invoice. The petitioner explained that the invoice was inadvertently left behind due to a change in conveyance at Nathdwara, Rajasthan. The authorities detained the conveyance and confiscated the goods, issuing a notice under Section 130 of the CGST Act demanding Rs. 3,88,234/-. The petitioner expressed willingness to pay the tax and penalty, but the goods and conveyance were not released, leading to the present petition.

Key Issues

1. Whether the detention and proposed confiscation of goods under Sections 129 and 130 of the CGST Act, 2017, were justified when the petitioner was willing to pay the tax and penalty, and the absence of the invoice was due to an inadvertent error during a change of conveyance? Petitioner's contention: The petitioner argued that the absence of the invoice was an inadvertent mistake and not an attempt to evade tax. They stated that the value of the goods was below the threshold requiring an e-way bill and expressed readiness to pay the applicable tax and penalty. They relied on the principle that procedural lapses should not lead to disproportionate consequences, especially when the tax liability is admitted. Revenue's contention: The judgment does not record specific arguments from the revenue regarding the justification of detention and confiscation. However, their actions of detaining and issuing a show-cause notice for confiscation indicate their stance that the non-possession of the invoice constituted a contravention of the Act.