M/S Av Traders vs. State Of Gujarat

Held

The Court noted the statement made by the learned Assistant Government Pleader that the impugned order passed under Section 130 of the Act dated 31st July, 2019, would be recalled. Fresh proceedings would be initiated in accordance with law, and a fresh order would be passed after giving an opportunity of hearing to the writ applicants, adhering to the principles explained in the Synergy Fertichem Pvt. Ltd. case. Consequently, the Court did not adjudicate the application on merits. The Court directed the writ applicants to deposit an amount of Rs.4,02,500/- towards the tax and penalty as determined under Section 129 of the Act. Upon deposit of this amount, the goods and the conveyance shall be released forthwith, subject to the final outcome of the confiscation proceedings. The Court clarified that this amount was determined while passing the order of confiscation under Section 130.

Facts

M/s AV Traders (the petitioner) filed a writ application challenging an order passed under Section 130 of the CGST Act, 2017 (MOV-11 order dated 31.07.2019). The petitioner sought to quash this order, direct the release of seized goods and the vehicle without demanding security, and any other appropriate relief. The goods and conveyance were detained and seized on 19.07.2019 and remained in the possession of the GST authorities. The petitioner argued that the impugned order was passed without adhering to principles of natural justice and in contravention of a recent High Court pronouncement in Synergy Fertichem Pvt. Ltd. & Anr. vs. State of Gujarat & Anr.

Key Issues

1. Whether the MOV-11 order dated 31.07.2019, passed under Section 130 of the CGST Act, 2017, is liable to be quashed for non-compliance with principles of natural justice and relevant High Court pronouncements? Petitioner's Argument: The petitioner contended that the impugned order was passed without proper adherence to the principles of natural justice and that the Court should follow its recent decision in Synergy Fertichem Pvt. Ltd. & Anr. vs. State of Gujarat & Anr. They sought the release of goods and the vehicle without security. Revenue's Argument: The learned Assistant Government Pleader, after obtaining instructions, stated that the impugned order would be recalled and fresh proceedings would be initiated in accordance with law, with an opportunity of hearing provided to the petitioner, keeping in mind the principles laid down by the Court in the Synergy Fertichem case. No specific arguments were recorded against the petitioner's primary contention regarding the validity of the order.