M. K . Traders Through Proprietor Mohammed B. K S/O Imbichi Bava vs. Union Of INDIA

Held

The Court held that the conveyance and goods should be released pending the confiscation proceedings. The reasoning was primarily based on the perishable nature of the Arecanut, which had been lying in the open for approximately 35 days and was likely to suffer extensive damage or destruction by the time confiscation proceedings concluded. The Court noted that the writ applicant had deposited the tax amount of Rs. 2,29,320/- and a penalty of Rs. 2,29,320/-. The Court directed the release of the conveyance and goods subject to the writ applicant executing a personal bond of Rs. 44,10,000/- to the satisfaction of the respondents. The release was made subject to the final outcome of the confiscation proceedings and the petitioner's right to prefer an appeal or avail other legal remedies.

Facts

The petitioner, M.K. Traders, challenged the seizure of goods (Arecanut) and a truck by the respondents under Section 68 of the CGST Act, 2017. The goods were transported from RM Traders, Kerala, to M.K. Traders, Gujarat. The truck was intercepted on June 6, 2019, at Songadh, District Tapi. Despite the driver possessing invoices, e-way bills, and LR receipts, and the petitioner providing requested documents via email, the respondents issued FORM GST MOV-04 and FORM GST MOV-06, questioning the genuineness of the transaction. The petitioner paid the applicable tax and penalty under Section 129(1)(a) under protest, but the goods and truck were not released. Confiscation proceedings under Section 130 were initiated, with a demand of Rs. 50,71,500/-.

Key Issues

1. Whether the Court should order the release of the seized goods and conveyance pending confiscation proceedings under Section 130 of the CGST Act, 2017, considering the perishable nature of the goods? The petitioner argued that the goods are perishable and deteriorating, and they have already deposited the applicable tax and penalty under Section 129(1)(a) to safeguard departmental interests and requested release. They contended that both supplier and purchaser are registered entities with genuine transactions and requisite documents. The respondents argued that confiscation proceedings under Section 130 were in progress, and the demand includes tax, penalty, and fine for confiscation of goods and conveyance, as envisaged in Section 130(1) and (2).