M/S Surya Roadways vs. Senior Intelligence Officers (Sio)

Facts

The petitioner, M/s. Surya Roadways, a proprietary concern and transporter, filed a writ application challenging the seizure of two of its trucks by Senior Intelligence Officers (SIOs) of the GST department. The trucks were seized on July 1, 2020, September 15, 2020, and September 18, 2020. The seizure was based on allegations that these trucks were previously used for transporting goods in contravention of GST provisions. An inquiry was initiated, and summons under Section 70 of the GST Act were issued to the petitioner, which the petitioner allegedly did not honor. The department's action stemmed from an investigation involving one Shri Saunak Desai, whose statement implicated the petitioner. The trucks were seized from the petitioner's office premises, not while in transit with goods.

Held

The Court held that while the inquiry and investigation initiated by the respondent authority should proceed in accordance with law, the two trucks seized should be released. The Court reasoned that for the purpose of the ongoing inquiry and investigation, the trucks did not need to remain in the custody of the department. The Court directed the respondent to release both trucks upon the petitioner furnishing an undertaking on oath that they would not transfer, part with possession, or create any encumbrance on the trucks until the conclusion of the inquiry or investigation. The petitioner would be permitted to use the trucks in their normal course of business. The Court clarified that it had not gone into the legality and validity of the inquiry or investigation itself, leaving it to the department to conduct it as per law. The Court also expected the petitioner to cooperate with the investigation and appear before the authorities as summoned.

Key Issues

1. Whether the two trucks could be lawfully seized under Section 129 of the GST Act, 2017, when they were not in transit carrying any goods at the time of seizure, and were seized from the petitioner's office premises? (Mixed question of law and fact, concerning Section 129 of the GST Act, 2017). Petitioner's Arguments: The petitioner argued that the seizure of the trucks was illegal and without application of mind, as the trucks were not in transit carrying goods at the time of seizure. They contended that the initiation of search proceedings and issuance of summons under Section 70 were without authority of law and constituted arbitrary and colorable exercise of power. Revenue's Arguments: The respondent revenue department contended that the trucks were seized based on past transactions where they were allegedly used in contravention of the Act. They also pointed to the petitioner's alleged non-compliance with summons issued under Section 70, and the implicating statement of Shri Saunak Desai.