M/S Shri Durga Traders vs. State Tax Officer

Held

The Court declined to delve into the merits of the confiscation proceedings, allowing the concerned authority to continue with the adjudication of the show cause notice issued under Section 130 of the CGST Act. However, recognizing that the seized goods (groundnuts) are perishable, the Court ordered the release of the goods and the conveyance pending the final outcome of the confiscation proceedings. To secure the revenue, the petitioner was directed to deposit Rs. 54,000/- towards tax and penalty, and the balance amount of Rs. 5,67,000/- was to be secured by way of a bank guarantee from a nationalized bank. The Court explicitly clarified that it had not adjudicated on the merits of the case, and the confiscation proceedings would continue independently.

Facts

M/s. Shri Durga Traders, a proprietary firm dealing in agricultural products, dispatched a consignment of groundnuts from Madhya Pradesh to Rajkot, Gujarat. On June 2, 2020, the truck carrying the goods was intercepted by the State Tax Officer at Vasad. Despite the driver presenting an invoice and e-way bill, the officer noted discrepancies. Consequently, the goods and the vehicle were seized and detained. On June 4, 2020, the petitioner received a notice for confiscation of goods and conveyance in Form GST MOV-10, proposing a total liability of Rs. 6,21,000/- towards tax, penalty, and fine. The hearing for this notice was scheduled for June 19, 2020.

Key Issues

1. Whether the High Court should intervene in the ongoing confiscation proceedings initiated under Section 130 of the CGST Act, 2017, given the discrepancies noted in the invoice and e-way bill. The petitioner argued that the entire action, including the show cause notice under Section 130, was illegal and invalid. The petitioner sought the immediate release of the conveyance and the goods. The revenue, represented by the State Tax Officer, initiated confiscation proceedings based on discrepancies found during the interception of the vehicle. The court did not record specific arguments from the revenue regarding the validity of the proceedings, but their action of issuing the notice and detaining the goods implies a contention that the discrepancies warranted such action.