Veer Enterprises Through Its Proprietor Bhakta Bir Pathak vs. The Union Of INDIA Through Finance Secretary Ministry Of Finance Deptt Of Revenue

Facts

The petitioner, Veer Enterprises, a sole proprietorship firm dealing in Betel nuts and dried Areca nuts, sold 17,780 kg of dried Areca nuts valued at Rs. 28,37,688/- to M/s Patil Trading Company. The petitioner provided tax invoices and an E-Way bill generated on November 1, 2023. On November 2, 2023, the vehicle carrying the goods was detained at Barhi. Despite the driver presenting the E-Way bill and invoices, the vehicle was not released. A notice in Form GST MOV-10 was issued on November 8, 2023, to which the petitioner responded via email on November 14, 2023. Subsequently, an order in Form GST MOV-11, dated November 15, 2023, was passed under Section 130 of the CGST Act, confiscating the goods and the conveyance.

Held

The Court did not find substance in the petitioner's argument that proceedings under Section 129 of the CGST Act cannot be automatically converted into confiscation proceedings under Section 130. However, the Court dismissed the writ petition on the ground that the petitioner failed to avail of an interim order dated February 9, 2024. This order had permitted the petitioner to furnish a bond for Rs. 27,02,560/- and other taxes and penalty instead of a bank guarantee. The petitioner did not apply for an extension or modification of this order and did not avail the opportunity to deposit the required amounts within a reasonable time, even after approximately one and a half months. The Court also noted that the writ petition involved serious disputed questions of fact regarding the nature of the purchase and sale of the confiscated goods, and the finding by the statutory authority that the recipient firm was non-existent. Consequently, the Court declined to exercise its discretionary powers under Article 226 of the Constitution. The interim order dated February 9, 2024, was recalled.

Key Issues

1. Whether the proceedings under Section 129 of the CGST Act can be automatically converted into confiscation proceedings under Section 130 of the CGST Act, rendering the confiscation order bad in law? Petitioner's argument: The petitioner contended that proceedings under Section 129 of the CGST Act, which allow for release of goods and conveyance upon payment of applicable tax and penalty, cannot be automatically converted into confiscation proceedings under Section 130. Therefore, the order of confiscation dated November 15, 2023, is legally invalid. Revenue's argument: The judgment does not explicitly record arguments from the revenue on this specific issue. However, the Court's inclination to dismiss the petition suggests a disagreement with the petitioner's contention, possibly implying that the conversion was permissible under the circumstances or that other factors led to the dismissal.