Rafik Nasir Ahmed vs. State Of Gujarat

Facts

The petitioner, Rafik Nasir Ahmed, filed a writ application challenging the seizure of goods and a truck under Section 129(1)(a) of the Central Goods and Service Tax Act, 2017. The Deputy State Tax Commissioner, Mehsana, issued a show-cause notice on October 5, 2019, proposing confiscation of the goods and conveyance. The notice cited discrepancies including a mismatch between the quantity of goods declared in the tax invoice and the quantity found during physical verification, alleged tax evasion by the supplier through claiming Input Tax Credit (ITC) without filing returns, and the absence of the recipient at their registered premises with no stock or business activity, suggesting a bogus registration for ITC. The petitioner sought the release of the seized goods and truck, provisionally or otherwise.

Held

The Court held that it was not inclined to entertain the writ application at the stage of the show-cause notice. The reasoning was that the petitioner should first file an appropriate reply to the show-cause notice to present their case and demonstrate that there was no breach of the Act or Rules. The Court noted that even if a final order of confiscation was passed under Section 130 of the Act, the same would be appealable under Section 107 of the Act, indicating that adequate alternative remedies were available. Therefore, the writ application was disposed of without delving into the merits of the seizure or the petitioner's claims for release of goods and the truck. No specific issue regarding the interpretation of Section 129(1)(a) or the alleged discrepancies was decided on merits.

Key Issues

1. Whether the High Court should entertain a writ application at the stage of a show-cause notice when statutory remedies are available, specifically concerning the seizure of goods and conveyance under Section 129(1)(a) of the CGST Act, 2017. Petitioner's contention: The petitioner sought the release of seized goods and the truck, arguing for provisional release under Section 129(1)(a) of the CGST Act, 2017, and seeking a Writ of Mandamus or Certiorari. The specific arguments made by the petitioner regarding the merits of the seizure are not detailed in the judgment, but the prayer indicates a challenge to the confiscation proceedings. Revenue's contention: The judgment does not explicitly record arguments from the revenue. However, the issuance of the show-cause notice proposing confiscation implies the revenue's stance that there was a breach of GST provisions warranting such action.