Shree Ram Twistex Private Limited Vs State of Gujarat & Anr. (Gujarat High Court)
Summary: The Gujarat High Court, in Shree Ram Twistex Private Limited Vs State of Gujarat & Anr., quashed a confiscation show-cause notice dated 27 August 2019 issued under Section 130 of the Central/Gujarat Goods and Services Tax Act, 2017, in Form GST MOV-10, after finding that the authorities had not passed any confiscation order despite the passage of more than seven years. The dispute arose when the petitioner’s goods and conveyance were detained under Section 129 and confiscation proceedings were initiated under Section 130. The petitioner had deposited the tax and penalty of Rs.1,35,308/- determined under Section 129 on 29 August 2019. By an interim order dated 30 August 2019, the High Court directed release of the goods while permitting the authorities to continue the confiscation proceedings, subject to the final outcome of the writ petition. At the final hearing on 30 September 2026, it was confirmed that the goods and conveyance had been released following payment, but no order under Section 130 had been passed.
The petitioner relied upon Panchhi Traders Vs State of Gujarat, decided on 11 December 2025, to contend that direct invocation of Section 130 without affording an opportunity to pay tax and penalty under Section 129, as applicable at the relevant time, was improper in the absence of the requisite intention to evade tax. The State submitted that Form GST MOV-10 had been issued because the petitioner failed to produce an e-way bill. The High Court did not undertake a further examination of the merits of these rival contentions. Instead, it considered the authorities’ failure to conclude the confiscation proceedings despite the liberty granted in 2019. Accordingly, the Court quashed the notice dated 27 August 2019 but reserved liberty to the respondents to pass necessary orders if they so desired. It expressly directed that any further proceedings or action under Section 130 must be preceded by an opportunity to the petitioner, comply with the principles of natural justice, and take into account the observations in Panchhi Traders. The writ petition was allowed, the rule was made absolute, and no costs were awarded.
Cases Discussed
1. M/s Panchhi Traders Thorugh Its Authorized Signatory Narendra Danabhai Daki Vs. State of Gujarat Through Deputy Commissioner (Enforcement) & Anr. (Gujarat High Court); Special Civil Application No. 9250 of 2020 and allied matters; 11/12/2025 — The petitioner relied on paragraph 64 concerning direct initiation of confiscation proceedings under Section 130 and the opportunity to comply with Section 129. The High Court directed that any further proceedings against the petitioner should take into account the observations recorded in this decision.
Appellant Was Represented By: Mr. Apurva N. Mehta and Mr. Vijay H. Patel.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
1. On 30.08.2019, the Coordinate Bench of this Court passed the following order:
Rule returnable on 25/09/2019. Ms. Maithili Mehta, the learned AGP waives service of notice of rule for and on behalf of the State of Gujarat. The respondent no.2 shall be served directly.
It appears that the vehicle and the goods came to be seized by the authority concerned under Section-129 of the Central/Gujarat Goods and Service Tax Act, 2017. It also appears that the proceedings under Section-130 of the Act have been initiated for the purpose of confiscation of the goods as well as the vehicle. It is not in dispute that the amount of tax and the penalty determined by the authority under Section-129 of the Act to the tune of Rs.1,35,308/- only [Rupees One Lakh Thirty-Five Thousand Three Hundred Eight Only] has been deposited on 29/08/2019. The payment receipt is at Page-19, Annexure’C’ to this writ-application.
In such circumstances, we direct the authority to immediately release the goods as well as confiscation. However, it shall be open for the authority to proceed further so far as the proceedings under Section-130 of the Act are concerned. However, they shall be subject to the final outcome of this writ-application.
Direct service is permitted.”
2. Today when the matter is taken up for hearing, it is informed to us that the petitioner has already paid the tax and penalty amount and the goods and conveyance have already been released. It is also informed to us that as on today, even after passage of more than 7 years, no order under section 130 of the Central/Gujarat Goods and Service Tax Act, 2017 (for short ‘the Act’) has been passed.
3. Learned advocate, Mr. Apurva N. Mehta appearing for the petitioner has placed reliance on the decision of this Court in the case of M/s Panchhi Traders Thorugh Its Authorized Signatory Narendra Danabhai Daki Vs. State of Gujarat Through Deputy Commissioner (Enforcement) & Anr., dated 11.12.2025 passed in the group of petitions being Special Civil Application No.9250 of 2020 and allied matters and has submitted that as per the observations made in paragraph No.64 of the said judgment, there was no intention of the petitioner, to infringe the alleged evasion of tax of the highest degree and hence, resorting to the provision of section 130 of the Act directly without giving an opportunity to the petitioner to pay the tax and penalty as required under section 129 of the Act, which was in the statute book at the relevant time, is improper.
4. However, learned AGP Ms. Tanushree Shrimal appearing for the respondent – State has submitted that due to non-production of the E-way bill, the notice under section 130 of the Act in Form GST MOV-10 was issued to the petitioner.
5. As recorded by the Coordinate Bench in the order dated 30.08.2019, the petitioner had already deposited the tax and penalty determined under section 129 of the Act however, the respondents refused to release the goods and conveyance of the petitioner confiscated on 27.08.2019. Without examining the matter further on merits, since we are of the opinion that despite the liberty reserved by the Court while passing the order dated 30.08.2019 in favour of the respondent authority to proceed further and pass the appropriate order under section 130 of the Act, the same is not done. At this stage, we quash and set aside the impugned notice dated 27.08.2019 issued under section 130 of the Act in Form GST MOV-10 reserving the liberty in favour of the respondents that in case they so desire, they may pass necessary orders. However, we clarify that any orders or any proceedings, which are initiated against the petitioner under section 130 of the Act, should not be initiated without giving prior opportunity to the petitioner and such order or action shall be in compliance with the principles of natural justice and the order shall be passed keeping in mind the observations recorded by this Court in the case of M/s.Panchhi Traders (supra). The present writ petition is allowed, accordingly. Rule is made absolute. No order as to costs.
