Royal Impex vs. State Of Gujarat

Facts

The writ-applicant, Royal Impex, a proprietary concern based in Thane, Maharashtra, is a registered taxable person under the GST Act. The applicant supplies goods to parties in Gujarat. In this instance, goods (Brass Scrap) were dispatched from Thane to three parties in Gujarat. While in transit, the conveyance carrying the goods was seized and detained. The matter had reached the stage of GST MOV-10, with an inquiry in progress. The applicant sought the quashing of the confiscation notice and the release of goods and conveyance, or alternatively, their provisional release under Section 67(6) of the GST Acts.

Held

The Court disposed of the writ-application by directing the respondent no.2 to release the goods and conveyance. This release was conditional upon the writ-applicant depositing the sum of Rs. 17,66,620/-. The Court explicitly stated that the merits of the case were not examined. The Department was left at liberty to continue with the inquiry at the stage of GST MOV-10. The Court's reasoning was based on the parties' agreement regarding the deposit and release, facilitating the provisional release of the goods and conveyance pending further inquiry. The ratio decidendi is that a High Court, in its writ jurisdiction, can facilitate the release of detained goods and conveyances upon a mutually agreed deposit amount, without prejudice to the ongoing departmental inquiry.

Key Issues

1. Whether the goods and conveyance detained under the GST Act should be released upon deposit of a specified amount by the writ-applicant? (Mixed question of law and fact, turning on Section 67(6) of the GST Acts and principles of provisional release). Petitioner's Argument: The petitioner argued that they are ready and willing to deposit an amount of Rs. 17,66,620/- towards tax and penalty. Upon such deposit, the Court should order the release of the goods and conveyance. They also sought provisional release of the goods and conveyance under Section 67(6) of the GST Acts. Revenue's Argument: The learned AGP for the State respondents submitted that if the writ-applicant is willing to deposit the stated amount, the goods and conveyance may be released. The respondents would be at liberty to continue with the inquiry at the GST MOV-10 stage.