M/S Avh Corporation vs. State Of Gujarat

Held

The High Court declined to exercise its extraordinary writ jurisdiction under Article 226 at that stage. The Court noted that a notice for confiscation under Section 130 of the Act had already been issued by the concerned authority. Therefore, it was incumbent upon the writ applicant to file a detailed reply to this notice to seek its discharge. The Court directed the concerned authority to pass an appropriate order concerning the notice of confiscation 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. The Court emphasized that the authority should pass an appropriate order on or before January 21, 2020, considering the goods and vehicle had been detained since November 5, 2019. The Court explicitly stated that it had not gone into the merits of the matter. The ratio decidendi is that when a notice for confiscation under Section 130 has been issued, the appropriate course of action for the assessee is to respond to that notice rather than seeking immediate release of goods and vehicle through a writ petition, and the authority must decide the confiscation proceedings expeditiously.

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 truck was intercepted at Songadh Checkpost. The authorities issued Form GST MOV-01, followed by MOV-2 citing defective documents and genuineness of goods requiring verification. Subsequently, Form GST MOV-06 was issued under Section 129 of the Act, and later a notice under Section 130 of the Act was issued, proposing confiscation of goods and vehicle and imposition of penalty. The petitioner contended that all documents were in order and verifiable online, and the authorities acted contrary to law by detaining the vehicle and goods.

Key Issues

1. Whether the detention of the truck and goods by the GST authorities was justified, considering the petitioner's claim that all documents were in order and verifiable online, and whether the issuance of a notice under Section 130 of the Gujarat Goods and Services Tax Act, 2017, was appropriate at this stage? (Question of law and mixed fact and law, turning on Sections 129 and 130 of the Act). Petitioner's arguments: The petitioner argued that no contravention of the Act was found, and all documents were in order. They contended that the authorities acted against the law by detaining the vehicle and goods, as everything could be verified online. They also pointed out that a notice under Section 129(3) had not been issued, and as per a government circular, the owner should be called upon to pay tax and penalty before further proceedings. The petitioner sought the release of the truck and goods. Revenue's arguments: The judgment does not record specific arguments from the revenue or State. However, the issuance of notices under Sections 129 and 130 indicates the revenue's stance that a breach of GST provisions had occurred, justifying the detention and proposed confiscation.