M/S Shiv Scrap Sales vs. State Of U.P. And Another

Held

The Court did not decide on the merits of the validity of the seizure order or the petitioner's claim of ownership. The Court observed that the dispute regarding the validity of the seizure order could not be adjudicated at that stage, especially given the findings in Form GST MOV-07 that the invoice was for a fake sale. The Court found that the application submitted by the petitioner as Annexure-'8' was undated and lacked proof of receipt by the respondent. Therefore, the Court disposed of the petition with a direction for the petitioner to approach the competent officer with a proper application asserting their ownership of the seized goods, along with a copy of the order. Upon receiving such an application, the competent officer was directed to deal with it appropriately and grant the petitioner an opportunity of hearing by issuing proper notice, in accordance with Section 129(3) of the CGST Act, 2017. The Court explicitly stated that it had not entered into the merits of the petitioner's claim.

Facts

The petitioner, M/s Shiv Scrap Sales, a registered GST dealer, had goods in transit accompanied by a valid e-Way bill generated on 14.11.2022 and a tax invoice. The goods were intercepted in Agra on 15.11.2022. The reason for seizure, as stated in Form GST MOV-06, was that the purchaser firm was non-existent and the sale/invoice was fake. The petitioner contended that the seizure was illegal and that the authority lacked jurisdiction to proceed under Section 129(3) of the CGST Act, 2017. The petitioner had submitted a claim to the department as the owner of the seized goods, but a notice under Section 129 was issued in the name of the driver. The petitioner argued that once their ownership claim was made, proceedings should have been conducted with due notice to them.

Key Issues

1. Whether the seizure of goods was illegal, thereby divesting the authority of jurisdiction to proceed under Section 129(3) of the CGST Act, 2017? The petitioner argued that the seizure was illegal as no reason was assigned for it, and the stated reason of a fake sale was false. They further contended that since they had claimed ownership, proceedings under Section 129 should not have been initiated against the driver and should have involved proper notice to the petitioner. The revenue's contentions were not explicitly recorded in the judgment regarding the illegality of seizure or jurisdiction, but the court noted the findings in Form GST MOV-07 that the invoice was for a fake sale.