The Gujarat High Court has ruled that, if upon verification of the documents and on verification of the goods, no discrepancy is found, the conveyance shall be allowed to move further. 

The petitioner has challenged the order dated 08.04.2019 passed by the third respondent in the exercise of powers under section 130 of the Central Goods and Services Tax Act, 2017, whereby, the vehicle bearing registration No. DL-01-GC-4470 together with the goods contained therein is ordered to be confiscated and tax, penalty and fine in lieu of confiscation of the goods and conveyance as computed therein have been levied. 

The petitioner contended that the driver of the truck was carrying invoice, e-way bill and lorry receipt while transporting brass electrical parts from Jamnagar to Delhi. The truck was intercepted by the third respondent – State Tax Officer on 14.01.2019 at 00:30 a.m. at Soyal Toll Gate. The driver of the truck had produced the documents relating to the goods which were being transported; however, the third respondent detained the truck on the ground that the genuineness of the goods in transit (its quantity etc.) and/or tender documents require further verification. Accordingly, on 14.01.2019, the third respondent issued an order in Form GST MOV-01 recording the statement of the driver as well as an order for physical verification/inspection of the conveyance and goods and the documents in Form GST MOV-02. 

The division bench comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen observed that, “The reasons for issuance of the notice for confiscation under section 130 of the CGST Act in Form GST MOV-10 are that upon preliminary verification of the dealer online, 42 e-way bills have been generated on December 2018, wherein, IGST has been shown to Rs.3,64,30,800/- and it appears that, dealers have not paid the same or that the purchases are not genuine. If that be so, nothing prevents the respondents from taking appropriate action against petitioner in accordance with law under the relevant provisions of the CGST Act. However, when the conveyance in question was carrying the goods which were duly accompanied by documents and no discrepancy was found in connection therewith, there was no reason for the third respondent to confiscate the same. The impugned order of confiscation passed by the third respondent under section 130 of the CGST Act, therefore, cannot be sustained”.

While quashing the order, the Court also clarified that the fact that this court has ordered release of the goods and conveyance will not, in any manner, come in the way of the respondents in proceeding against the petitioner in connection with the contravention of any provisions of the GST Acts and the rules framed thereunder which find reference in the affidavit-in-reply filed on behalf of the respondents.

Published On : 23-10-2019

Source : Tax Scan