M/S Avh Corporation vs. State Of Gujarat

Held

The High Court declined to exercise its extraordinary writ jurisdiction under Article 226 at this stage. The Court noted that a notice for confiscation under Section 130 of the Act had been issued by the concerned authority. The Court directed the writ applicant to file an appropriate detailed reply to the confiscation notice. The Court also directed the concerned authority to pass an appropriate order regarding the confiscation notice within 15 days from the date of the order. The writ applicant was permitted to file its reply at the earliest, and the authority was to consider it while passing the decision, keeping in mind the principles explained in the case of Synergy Fertichem Pvt. Ltd. V/s. State of Gujarat. The Court further directed that the appropriate order be passed on or before January 21, 2020, given the detention of goods and vehicle since November 5, 2019. The Court explicitly stated that it had not gone into the merits of the matters. The issue of whether the initial detention was justified was not decided on merits.

Facts

M/s AVH Corporation, a trader of building materials, filed three writ applications challenging the detention of its truck (GJ-36-T-9718) and goods by the GST authorities on November 5, 2019. The petitioner had procured vitrified tiles from M/s Pragati Exports and was transporting them to M/s Dhanush Exim in Hyderabad. The petitioner had generated an e-way bill from Morbi, Gujarat, indicating the dispatch date as November 4, 2018. The truck was detained at Songadh Checkpost, and the authorities issued Form GST MOV-01, followed by MOV-2 stating defective documents and requiring further verification. Subsequently, Form GST MOV-06 was issued under Section 129 of the Act, citing defective documents. The petitioner contended that all documents were in order and verifiable online, and that the authorities had not issued a notice under Section 129(3) as required by a government circular. The authorities later issued a notice under Section 130 for confiscation of goods and vehicle.

Key Issues

1. Whether the detention of the truck and goods by the GST authorities was justified given that the petitioner claims all documents were in order and verifiable online, and that a notice under Section 129(3) was not issued, as per the petitioner's contention. This issue turns on the interpretation and application of Section 129 of the CGST/GGST Act, 2017, and relevant circulars. Petitioner's Arguments: The petitioner argued that the detention was illegal as no contravention of the Act was found, and all documents were verifiable online. They contended that the authorities failed to issue a notice under Section 129(3) and did not follow the procedure outlined in government circulars, which require calling upon the owner to pay tax and penalty before proceeding further. They relied on the principle that vehicle detention is not warranted when documents are in order and verifiable online. Revenue/State's Arguments: The judgment does not explicitly record arguments from the revenue or state. However, their action of detaining the vehicle and issuing notices under Sections 129 and 130 indicates their belief that there was a contravention of the GST laws.