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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
U. DURGA PRASAD RAO, VENKATA JYOTHIRMAI PRATAPA, JJ.
M/s. Arhaan Ferrous And Non-Ferrous Solutions Pvt.Ltd. – Appellant
Versus
The Deputy Assistant Commissioner – Respondent
Writ Petition Nos.15481, 15482, 15486 and 15487 of 2023
Decided on : 03-08-2023
GST - Detention of Goods and Vehicles - APGST/CGST Act, 2017 - Section 129, Section 130 - Summary of Acts and Sections: The court discussed the authority of a proper officer to inspect goods in movement under Section 68 of the CGST/APGST Act, 2017 and the details of documents required to be carried under Rule 138A. It highlighted the distinction between Section 129 and Section 130 of the CGST Act as explained in the cases of M/s Rajeev Traders v. Union of India and Synergy Fertichem Pvt Ltd v. State of Gujarat, emphasizing that the proceedings for detention of goods under Section 129 and confiscation of goods under Section 130 are independent of each other. The court concluded that the proper officer cannot confiscate the goods of the petitioner without initiating independent proceedings under Section 129 of the CGST/APGST Act against the petitioners. It directed the respondent to initiate proceedings against the petitioners under Section 129 and conduct an enquiry, while releasing the detained goods and vehicles upon certain conditions.
Fact of the Case:
The 1st petitioner, a trader in iron scrap, purchased goods from the 4th respondent and sold them to M/s Radha Smelters Private Limited. While the goods were in transit, the 1st respondent detained the vehicles and goods, alleging that the 4th respondent had no place of business at Vijayawada and issued confiscation notices against the goods and vehicles.
Finding of the Court:
The court found that the 1st respondent cannot confiscate the goods of the petitioner without initiating independent proceedings under Section 129 of the CGST/APGST Act against the petitioners. It directed the respondent to initiate proceedings against the petitioners under Section 129 and conduct an enquiry, while releasing the detained goods and vehicles upon certain conditions.
Issues: The main issue was whether the 1st respondent was legally justified in detaining the goods and vehicles of the petitioners without initiating any proceedings against them but only against the 4th respondent under Section 130 of the CGST/APGST Act, 2017.
Ratio Decidendi: The court emphasized the independence of proceedings for detention of goods under Section 129 and confiscation of goods under Section 130 of the CGST/APGST Act, as explained in relevant case laws. It concluded that the proper officer cannot confiscate the goods of the petitioner without initiating independent proceedings under Section 129 of the CGST/APGST Act against the petitioners.
Final Decision: The court directed the respondent to initiate proceedings against the petitioners under Section 129 of the CGST/APGST Act, 2017 and conduct an enquiry, while releasing the detained goods and vehicles upon certain conditions.
ORDER :
U. Durga Prasad Rao, J.
The 1st petitioner is the owner of the goods and 2nd petitioner is the owner of the vehicle in the above writ petitions and they seek writ of mandamus declaring the action of 1st respondent in detaining their goods and vehicles while in transit with valid invoices as illegal and consequently to set aside the Form GST MOV -01, dated 12.06.2023 and confiscation notices in Form GST MOV-10, dated 14.06.2023 proposing to confiscate the goods and vehicles and pass such other orders deemed fit.
2. Petitioners’ case succinctly is thus:
(a) 1st petitioner who is common in the above batch of writ petitions is a trader in iron scrap under a valid registered GST No.37AATCA9148B1ZD. He purchased the iron scrap from the 4th respondent under invoice, dated 12.06.2023 and in turn sold the same in favour of M/s Radha Smelters Private Limited, Sankarampet, Medak District, Telangana State under valid invoice number. The 1st petitioner engaged the vehicles of the 2nd petitioner for transporting goods from Vijayawada to Sankarampet and consignment was sent along with valid documents such as invoice, way bill, weighment slip etc., While goods were in transit the 1st respondent detained the vehicles along with the goods on 12.06.2023 on the alleged ground that the vendor of the 1st petitioner i.e., the 4th respondent has no place of business at Vijayawada and accordingly issued impugned proceedings in the name of 4th respondent by deliberately ignoring the documents produced by the drivers at the time of check.
(b) It is further case of the petitioners that the 4th respondent having sold the scrap has no interest and in case of default on his part, the 1st respondent may initiate action against the 4th respondent. However, under the guise of initiating proceedings against the 4th respondent, the 1st respondent cannot put the petitioners in trouble as long as the transaction is covered by all relevant and applicable documents.
(c) It is further case of the petitioners that the 1st respondent did not follow the procedure contemplated under APGST/CGST Act, 2017 and in straight away issued proceedings proposing to confiscate the goods under transit without issuing notices in GST MOV -02, 03, 04, 05, 06 07, 08 or GST MOV -09 before issuing notice of confiscation in Form GST MOV -10. It is also contended that the documents served on the 2nd petitioner do not contain DIN Number. The 1st respondent has no right or jurisdiction to detain the goods and vehicle of the petitioners.
Hence, the writ petition.
3. The 1st respondent filed counter mainly contending thus:
The main legal point established in the judgment is the independence of proceedings for detention of goods under Section 129 and confiscation of goods under Section 130 of the CGST/APGST Act, as expl....
The court established that confiscation under Section 130 requires prior action under Section 129, and adherence to natural justice is essential in such proceedings.
Point of Law - Section 68 of the GST Act which empowers the authority concerned to intercept the vehicle and the goods. The said provision of Section 68 is required to be reproduced.
Under Section 15 of the Act, the value of the supply of goods would be the transaction value and a transaction value would be the price that is paid or payable for the supply of goods.Q
Provisional release of goods pending confiscation is not authorized under Section 130 of the CGST Act; legal authority for property deprivation must follow specific statutory provisions.
The court ruled that equitable relief is denied to parties lacking clean hands, especially where fraudulent practices are evident in tax evasion involving bogus entities.
Minor discrepancies in transport documentation do not warrant penalties under Section 129 of the Central Goods and Services Tax Act, with general penalties appropriately applied instead under Section....
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