Shiv Shakti Textiles Vs State of Gujarat & Others (Gujarat High Court)
Summary: The Gujarat High Court, in Shiv Shakti Textiles Vs State of Gujarat, directed the GST authorities to release detained goods and a vehicle upon deposit of ₹89,000 towards tax, penalty and interest. The Court held that goods and vehicles should not remain under detention for an indefinite period while confiscation proceedings are pending. However, it declined to interfere with the ongoing adjudication under Section 130 of the GST Act and expressly clarified that it had not examined the merits of the dispute.
The petitioner, a proprietary concern, had received an order for the supply of yarn from a customer in Uttar Pradesh. Its sister concern, M/s. Guru Fibres, situated in Maharashtra, was instructed to deliver the goods directly to the customer. The petitioner prepared invoices and generated online e-way bills but claimed that it had inadvertently omitted Maharashtra as the place of dispatch. During transit, the GST Checking Squad intercepted the vehicle and issued a detention order dated 28 November 2020 in Form GST MOV-6 under Section 129 of the GST Act. Although the petitioner applied for provisional release under Section 67(6), no order was passed on the application. Instead, the authorities issued a confiscation notice in Form GST MOV-10 on the same date.
Challenging the detention and confiscation proceedings, the petitioner approached the High Court under Article 226 of the Constitution, seeking quashing of the impugned notices and release of vehicle number GJ-05-BZ-6691 along with the goods. Alternatively, it requested provisional release under Section 67(6). The petitioner’s counsel questioned the legality of the confiscation notice issued under Section 130 and offered to deposit ₹89,000 towards tax, penalty and interest to secure release. The State’s counsel submitted that if the confiscation adjudication was permitted to continue, there should be no difficulty in releasing the goods and vehicle upon payment of the proposed amount.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs;
“(A) This Hon’ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside impugned classification notice dated 28.11.2020 (annexed at Annexure-A)
(B) This Hon’ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, , order or direction quashing and setting aside impugned detention order dated 28.11.2020 (annexed at Annexure-B)
(C ) This Hon’ble Court may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, or order directing the Respondents to forthwith release the truck number GJ-05-BZ-6691 along with goods contained therein;
(D) In the alternative, this Hon’ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith provisionally release the truck number GJ-05-BZ-6691 along with goods contained therein under Section 67(6) of the GST Act.
(E) Pending notice, admission and final hearing of the petition, this Hon’ble Court may be pleased to direct the Respondents to forthwith release the truck number GJ-05-BZ-6691 along with goods contained therein and further proceedings pursuant to impugned classification notice dated 28.11.2020 (annexed at Annexure-A) may please be stayed;
(F) Ex parte and interim relief in terms of prayer B may kindly be granted;
(G) Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray.”
2. It appears from the materials on record that the writ applicant is a proprietary concern and it received its order for purchase of yarn from the customer located at U.P. The writ applicant has a sister concern by name M/s.Guru Fibres in the State of Maharashtra. The writ applicant asked its sister concern to deliver the goods at U.P. It is the case of the writ applicant that it prepared the invoices and generated the on-line bills for such movement of the goods. It is expected by the writ applicant that in inadvertently it fails to mention the place of dispatch at Maharashtra in the E-way bill.
3. While the goods were in transit, the Checking Squad of the GST intercepted the vehicle and, thereafter, passed an order of detention dated 28.11.2020 in Form GST MOV-6 under Section 129 of the GST Act. As the goods and the vehicle came to be detained, the writ applicant preferred an application for provisional release of the same in accordance with Section 67(6) of the Act.
4. It appears that no order has been passed on such application, seeking provisional release of the goods and vehicle till this date. On the contrary, it appears that on the very same day and date of seizure, i.e, 28.11.2020, confiscation notice in Form GST MOV-10 came to be issued.
5. The writ applicant, being dissatisfied with the issuance notice in Form GST MOV-10 has come up with this writ application.
6. We have heard Mr. Uchit Sheth, the learned counsel appearing for the writ applicant and Mr. K.M. Antani, the learned AGP appearing for the State-respondents.
7. Mr. Sheth has questioned the legality and validity of the very same action of issuing notice in Form GST MOV-10 under Section 130 of the Act on manifold grounds. However, we are of the view that we should not interfere at this point of time with the adjudication undertaken pursuant to the notice in Form GST MOV-10. Ultimately, if final order of confiscation is passed under Section 130, it shall be open for the writ applicant to avail appropriate legal remedy available to him. However, we are of the view that the goods and the vehicle should not be allowed to remain under detention for an indefinite period of time. Mr. Sheth, the learned counsel appearing for the writ applicant submitted that his client would deposit an amount of Rs.89,000/- towards the tax plus penalty plus interest, and upon deposit of such amount, the vehicle and the goods may be ordered to be released.
8. On the other hand, Mr. Antani, the learned AGP, would submit that if the Court is permitting the authority to adjudicate the notice in Form GST MOV-10, then there should not be any difficulty in releasing the goods and the vehicle upon deposit of the amount of Rs.89,000/-
9. Having regard to the aforesaid, we direct the writ applicant to deposit an amount of Rs.89,000/- with the respondent No.2 and upon deposit of such amount, the respondent No.2 shall, at the earliest, release the vehicle and the goods. We clarify that we have otherwise not gone into the merits of the matter.
