M/S Hari Om Company vs. State Of Gujarat

Facts

M/s Hari Om Company, a proprietary firm dealing in aracanut and spices, filed a writ application challenging a detention order dated March 12, 2020 (Form GST MOV-6) and a confiscation notice dated March 12, 2020 (Form GST MOV-10) issued by the GST authorities. The petitioner's goods, transported in vehicle no. GJ-25-U-8721 from Kerala to Ahmedabad, were intercepted on March 7, 2020, near Vadodara. The authorities noted discrepancies in documents and initiated proceedings under Section 129 and Section 130 of the CGST/Gujarat GST Act, 2017. A previous order of confiscation was quashed by the High Court for lack of hearing, and the matter was remanded for fresh adjudication. The current writ application sought to quash the detention and confiscation orders and secure the release of the vehicle and goods.

Held

The Court declined to interfere at the stage of adjudication of confiscation proceedings under Section 130 of the Act, stating that these proceedings should proceed in accordance with law. However, to protect the goods from deterioration and balance the interests of both parties, the Court directed the writ applicant to deposit an amount of Rs. 4,20,000/- towards tax and penalty. Additionally, the petitioner was required to furnish a bank guarantee of Rs. 22,00,000/- from a nationalized bank, equivalent to 50% of the approximate goods value (Rs. 44,00,000/-). Upon compliance, the authorities were directed to release the goods and vehicle at the earliest. The bank guarantee would abide by the final outcome of the adjudication. The Court explicitly stated it had not expressed any opinion on the merits of the case, and the adjudication proceedings would be completed independently.

Key Issues

1. Whether the detention and seizure of the goods and conveyance were illegal, as argued by the petitioner who claimed the driver possessed all valid documents including an E-Way bill, and that no breach of the Act or Rules was committed. The petitioner sought quashing of the detention and confiscation orders and release of the goods and vehicle. 2. Whether the writ application was maintainable given the existence of a statutory remedy of appeal under Section 107 of the Act, as contended by the State. The State argued that various irregularities were noticed, including defective documents, questionable genuineness of goods, absence of E-Way bill for goods in transit, non-existent principal place of business for associated entities, delayed filing of returns, and misrepresentation of inward supplies as outward supplies. The State prayed for the rejection of the writ application.