M/S Sky International vs. Union Of INDIA
Original PDF →Facts
The petitioner, M/s Sky International, a registered dealer in metal scrap, transported 6580 Kgs of Copper Scrap valued at Rs. 10,04,154/- on 21.06.2021. The goods were intercepted on 22.06.2021 by Respondent No. 5. Despite the driver producing a tax invoice, an order of physical verification was issued. Subsequently, a detention order under Section 129(1) of the GGST Act was passed, citing lack of documents and need for further verification. The petitioner alleges that without following the procedure under Section 129(3), a notice under Section 130 for confiscation was issued. An order dated 16.10.2021 confirmed a tax demand of Rs. 7,71,044/-, imposed an equivalent penalty, and a fine of Rs. 7,71,044/- in lieu of confiscation of the conveyance. The petitioner filed an appeal under Section 107 of the GGST Act, making a pre-deposit of Rs. 78,000/-. While the appeal was pending, Respondent No. 5 initiated auction proceedings for the confiscated goods via a notice dated 12.06.2022. The petitioner filed the present Special Civil Application seeking to quash the auction notice and direct the release of goods and conveyance.
Held
The Court noted that the controversy was narrow and, with the consent of the parties, took up the matter for hearing. The petitioner's primary grievance was the initiation of auction proceedings while their appeal was pending and unheard. The Revenue, through the learned Assistant Government Pleader, assured the Court that the Appellate Authority (Respondent No. 4) would decide the pending appeal within two months. In light of this submission, the Court found that the prayers made by the petitioner would be satisfied, and other reliefs would be addressed by the Appellate Authority during its decision on the merits of the appeal. Consequently, the Court disposed of the petition without entertaining it on merits, issuing a direction to Respondent No. 4 to decide the appeal within two months, preferably on or before 15.11.2022, in accordance with the law. The Court clarified that it had not expressed any opinion on the merits of the case and that the petitioner was entitled to raise all contentions before the Appellate Authority. The petition was disposed of based on the statement made by the learned AGP.
Key Issues
1. Whether the impugned auction notice dated 12.06.2022 is liable to be quashed and set aside, considering the pendency of the appeal before the Appellate Authority under Section 107 of the GGST Act? 2. Whether the Respondent No. 5 should be directed to release the confiscated goods and conveyance pending the decision of the appeal? Petitioner's Contention: The petitioner argued that an appeal was filed in June 2022, but it had not been heard, compelling them to file the present petition. They sought directions to quash the auction notice, release the confiscated goods and conveyance, and direct the Appellate Authority to hear and decide the appeal within two weeks. Revenue's Contention: The learned Assistant Government Pleader, on instructions, submitted that Respondent No. 4 (Appellate Authority) would decide the pending appeal within a period of two months.
Sections Cited
Section 129, Section 130, Section 107, Section 107(6)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.Heard learned advocate Mr. Love R. Sharma for the petitioner and learned Assistant Government Pleader Mr. Trupesh Kathiria for the respondent State. 2.Since the controversy raised in this petition is in narrow compass, with the consent of the learned advocates for the respective parties, the same is taken up for hearing. C/SCA/17998/2022 ORDER DATED: 15/09/2022 3.The petitioner has prayed for the following reliefs : “a) … calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof, quash and set aside impugned auction notice dated 12.06.2022. b) … directing the Respondent no.5 to release the confiscated goods along with conveyance
c) … directing the Respondent No. 5 to not auction the confiscated good and conveyance till matter is sub-judice before the Appellate Authority. d) … directing the Respondent No. 4 to give personal hearing and decide the appeal within 2 weeks or within such time as this Hon'ble Court deem fit. e) … directing the Respondent No. 5 to release confiscated goods in terms of Section 129(1) of the GGST and consider the value of goods, for the said purpose, as mentioned in the tax invoice by the petitioner.” 4.Brief facts of the case are as under : 4.1) The petitioner is engaged in the trading of metal scrap and is registered with the Goods and Service Tax department. C/SCA/17998/2022 ORDER DATED: 15/09/2022 4.2) It is the case of the petitioner that the petitioner had supplied 6580 Kgs of Copper Scrap to M/s. Dharamraj Industries under tax invoice dated 21.06.2021 for taxable value of Rs.10,04,154/- which was reported in periodical GSTR-1 and GSTR-3B for the month of June 2021. 4.3) While the said goods were being transported from petitioner’s warehouse at Bhavnagar to Vapi through Vehicle bearing registration no.GJ 04 AT 8198, the same was intercepted and inspected during the transit at Bagwada Toll Plaza by respondent no.5 on 22.06.2021 at 10:55 am. Statement of driver of the vehicle was recorded under Form GST MOV-01. Though the driver produced tax invoice for verification, the respondent no.5 passed order of physical verification of the conveyance and goods in Form MOV-02 for C/SCA/17998/2022 ORDER DATED: 15/09/2022 further verification.
4) Upon verification, respondent no.5 issued detention order in Form GST MOV-06 under section 129(1) of the Gujarat Goods and Service Tax Act, 2017 (For short “GGST Act”) for the reason that no documents were produced at the time of inspection and the genuineness of the goods in transit and/or documents requires further verification. 4.5) It is the case of the petitioner that without issuing notice under Form GST MOV-07 and order under Form MOV-09 in accordance with section 129(3) of the GGST Act, the respondent no.5 directly issued notice under Form GST MOV-10 in terms of section 130 of the GGST Act and proposed confiscation of the goods. 4.6) The petitioner filed reply dated C/SCA/17998/2022 ORDER DATED: 15/09/2022 31.07.2021 before respondent no.
Respondent no.5 vide order dated 16.10.2021 valued the goods at the rate of Rs.651/- per Kg and confirmed tax demand of Rs.7,71,044/- and imposed equivalent penalty and further fine in lieu of confiscation of conveyance was determined to be Rs.7,71,044/-. 4.7) Being aggrieved by the aforesaid order, the petitioner filed an appeal under section 107 of the GGST Act before respondent no.4 and made a pre-deposit of Rs. 78,000/- which was 10% of the tax demand in terms of section 107(6) of the GGSt Act. 4.8) The petitioner thereafter vide letters dated 9.3.2022, 11.4.2022 and 2.6.2022 requested the respondent no.4 to conduct the hearing in the appeal and decide the matter at the earliest since the conveyance and goods were still under C/SCA/17998/2022 ORDER DATED: 15/09/2022 detention with respondent no.5. 4.9) During the pendency of the appeal, the respondent no.5 initiated auction proceedings to auction the confiscated goods vide impugned auction notice dated 12.6.2022. 4.10) The petitioner vide letter dated 14.6.2022 requested respondent no.5 to stay the auction proceedings. The petitioner also vide letter dated 21.6.2022 submitted copy of appeal along with the pre-deposit details with respondent no.5. 4.11) Being aggrieved by the issuance of auction notice, the petitioner has preferred the present petition. 5.Learned advocate Mr.Sharma for the petitioner submitted that though the petitioner has preferred the appeal before respondent no.4 in the month of June 2022, the same is not C/SCA/17998/2022 ORDER DATED: 15/09/2022 heard and therefore, the petitioner is left with no option but to prefer this petition. 6.Learned Assistant Government Pleader Mr. Kathiria upon instructions submitted that respondent no.4 shall decide the pending appeal within a period of two months. 7.In view of above statement made by learned AGP Mr. Kathiria prayers made by the petitioner would be satisfied and other prayers would be taken care of by the Appellate Authority while deciding the appeal on merits. 8.Therefore, instead of entertaining the petition on merits, the same is disposed of with a direction to the respondent no.4 to decide the appeal within a period of two months and preferably on or before 15.11.2022 in accordance with law. C/SCA/17998/2022 ORDER DATED: 15/09/2022 9.The petitioner is entitled to raise all the contentions which are raised in this petition before the Appellate Authority. It is made clear that we have not expressed any opinion on merits and the petition is disposed of in view of the statement made by learned Assistant Government Pleader Mr. Kathiria on instructions received from respondent no.4. 10. The petition is accordingly disposed of. No order as to costs. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) RAGHUNATH R NAIR
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.