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2022 Supreme(Online)(Guj) 1680
GUJARAT HIGH COURT
N.V. Anjaria, J
Dhanlaxmi Metals v. State of Gujarat
Writ Petition
For the Appellants/Petitioners: Uchit Sheth
For the Respondents: Trupesh Kathiria
Court ruled that mandatory provisions necessitate provisional release of seized goods upon compliance with section 67(6) of the GST Act.
Headnote:(A) Central Goods and Services Tax Act, 2017 - Sections 67(6), 129 and 130 - Provisional release of goods and conveyance - Petitioners challenged order denying provisional release despite valid documents - Court observed mandatory nature of section requiring release upon compliance with prescribed conditions - Provisional release permissible irrespective of goods being seized in transit or at premises of taxable person - Respondents directed to provisionally release goods upon bond execution and payment of applicable dues. (Paras 36, 37, 39)
(B) Goods and Services Tax - Seizure and confiscation - Provisions outlined regarding seizure of goods in transit and conditions for provisional release specified - Court emphasized legislative intent to not keep goods inactive during adjudication process.
| Table of Content |
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| 1. petitioners challenge order for provisional release of goods. (Para 1 , 2 , 3 , 4) |
| 2. legal arguments regarding seizure and provisional release. (Para 5 , 10 , 11 , 12 , 15) |
| 3. court emphasizes clarity in provisions related to seizure and confiscation. (Para 29 , 30 , 34) |
| 4. provisional release is mandated by statute under certain conditions. (Para 36 , 37) |
| 5. final conclusion directs provisional release of goods. (Para 39 , 40) |
1. Rule. Learned Assistant Government Pleader Mr. Trupesh Kathiria waives services of notice of rule on behalf of the respondent - State.
2. By these petitions, the petitioners have prayed for setting aside the order under S.129 of the Central / Gujarat Goods and Services Tax Act, 2017 (For short "the GST Act") in Form GST MOV - 06 and show cause notice under S.130 of the GST Act in Form GST MOV - 10 and further prayed for release of the goods and conveyance detained by the respondent authorities.
3. The petitioners in the alternative have also prayed for quashing and setting aside the order dated 11.10.2021 of the respondent authorities denying the provisional release of the goods and conveyance under S.67(6) / S.129(2) of the GST Act even if goods and vehicles are seized in transit.
4. As these matters are to be disposed of on limited issue of alternative prayers made by the petitioners keeping the right of the petitioners open to challenge such order passed in Form MOV - 11 under S.130 of the GST Act, with the consent of the learned advocates for the respective parties, the petitions were taken up for hearing to consider the issue as to whether during the pendency of the proceedings, the authority can exercise powers under S.67(6) and / or S.129(2) of the GST Act for provisional release of the goods and conveyance or not.
5. Learned advocate Mr. Uchit Sheth for the petitioners submitted that it is not in dispute that the goods and conveyance were accompanied by valid documents i.e. tax invoice and e - way bill and even then the goods were seized and notice for confiscation under S.130 of the GST Act was issued on ground of alleged irregularities in the transactions of upstream vendors.
6. It was submitted that when the writ applicant applied for provisional release of goods under S.67(6) of the GST Act pending confiscation proceedings, such application was rejected by impugned letter dated 11.10.2021 on the ground that such release is not possible once the proceedings are initiated under S.130 of the GST Act.
7. Learned advocate Mr. Sheth submitted that S.130 of the GST Act is a substantive provision providing for the circumstances in which goods shall be liable for confiscation and does not contain any provision for seizure of the goods.
8. Learned advocate Mr. Sheth submitted that there are only two statutory provisions which empower the authorities to seize the goods. While S.67(2) of the GST Act provides for seizure of goods liable for confiscation, S.129(1) of the GST Act provides for seizure of goods in transit if movement of goods is in contravention of the provisions of the GST Act. Both such provisions provide for specific mechanism for release of seized goods.
9. It was submitted that S.67(6) of the GST Act provides for provisional release of goods either on furnishing prescribed security along with bond or on payment of tax and penalty whereas S.129(2) of the GST Acts (as it existed during the period in question) provides that the provisions of S.67(6) of the GST Acts shall mutatis mutandis apply to seizure of goods under S.129(1) of the GST Act. Thus the contention that there is no power available to release seized goods liable for confiscation is contrary to clear statutory provisions.
10. Learned advocate Mr. Sheth further submitted that for confiscation, goods necessarily have to be seized by the authority and once the goods are seized and if released on certain terms and conditions, then also confiscation is permissible. In support of such submission, he relied upon the decision
