Metallek Trading Private Limited vs. State Of Gujarat

Facts

The petitioner, Metallak Trading Private Limited, a wholesale scrap trader registered under GST, dispatched copper scraps from Surat to Nurpura, Gujarat. The goods were transported in a vehicle owned by Hariom Roadways. During transit on February 15, 2022, the goods were detained near Nurpura Gam. The authorities recorded the driver's statement, conducted an inspection, and issued a notice in Form GST MOV-10, proposing confiscation of goods and conveyance under Section 130 of the Act. The petitioner filed a writ application seeking to quash the detention notices and orders and for the release of the truck and goods. The petitioner had deposited Rs. 3,25,454/- towards penalty, which is 200% of the tax amount. The value of the goods was approximately Rs. 9,00,000/-.

Held

The Court declined to interfere with the ongoing confiscation proceedings initiated under Section 130 of the CGST Act, 2017, acknowledging that the matter was at the stage of Form GST MOV-10. However, the Court was inclined to order the release of the goods and the conveyance. This decision was based on the fact that the writ-applicant had deposited an amount of Rs. 3,25,454/- by a challan dated March 10, 2022, which represented 200% of the tax amount, towards penalty. The Court directed that the goods and conveyance be released subject to the writ-applicant filing an undertaking in writing on oath, to the satisfaction of the authority concerned, and also by executing a bond for the amount that may be levied towards fine in lieu of confiscation. The same directions were applied to two connected writ applications where penalties had also been paid.

Key Issues

1. Whether the Court should interfere with the ongoing confiscation proceedings initiated under Section 130 of the CGST Act, 2017, given that the matter is at the stage of Form GST MOV-10? Petitioner's Argument: The petitioner sought the release of the goods and conveyance by quashing the detention notices and orders. While not explicitly stated, the filing of a writ application implies a challenge to the legality or procedural fairness of the detention and proposed confiscation. Revenue's Argument: The revenue, represented by the learned AGP, did not explicitly record arguments against the release of goods and conveyance. The Court noted that it did not want to "come in the way of the authorities so far as the confiscation proceedings are concerned," suggesting the revenue's stance was to allow the proceedings to continue.