Facts of the Case

The petitioner, M/s Mehta Enterprise, a sole proprietorship concern, purchased tobacco from various suppliers after making payments through proper banking channels. The goods were subsequently sold to M/s Flavor Feast Dairy Products, Bihar, and were being transported along with a valid tax invoice and e-way bill.

While transporting approximately 18,000 kilograms of tobacco, the vehicle was intercepted on 21.09.2022 on the Ambaji–Abu Road Highway. After recording the driver's statement, the authorities inspected the goods and vehicle, detained them under Section 129, and thereafter initiated confiscation proceedings under Section 130 by issuing GST MOV forms.

The petitioner had earlier approached the Gujarat High Court but withdrew the petition to pursue the statutory remedy. Subsequently, after the confiscation order in GST MOV-11 and issuance of an auction notice dated 14.12.2022, the petitioner again approached the High Court challenging the confiscation and proposed auction.

 

Issues Involved

  1. Whether the High Court should entertain a writ petition after the petitioner had earlier withdrawn a similar petition to avail the statutory appellate remedy.
  2. Whether auction of detained goods should proceed while the petitioner intends to file a statutory appeal against the confiscation order.
  3. Whether interim protection should be granted pending consideration of the appeal under the CGST/GGST Act.

 

Petitioner's Arguments

  • The goods were transported with valid tax invoices and an e-way bill.
  • Payments to suppliers had been made through legitimate banking channels.
  • The confiscation order and detention proceedings were illegal and liable to be quashed.
  • Since tobacco is susceptible to deterioration and commercial loss, the proposed auction would cause irreparable injury.
  • The petitioner sought immediate release of the goods and vehicle and requested the Court to stay the auction proceedings until the appeal could be considered.

 

Respondent's Arguments

  • The State submitted that the petitioner had already filed and voluntarily withdrawn an earlier writ petition after being permitted to pursue the statutory remedy.
  • The confiscation order had already attained finality, and the appropriate remedy available to the petitioner was to file an appeal under the GST law.
  • The only subsequent development was the issuance of the auction notice, which did not justify bypassing the statutory appellate mechanism.

 

Court Order / Findings

The Gujarat High Court observed that although the petitioner had withdrawn the earlier writ petition to pursue the statutory remedy, the subsequent auction notice constituted a fresh cause of action warranting limited judicial intervention.

The Court held that:

  • The petitioner shall file the statutory appeal within three days from receipt of the order.
  • Upon demonstrating willingness to make the minimum mandatory pre-deposit as required under the GST law, the appellate authority shall consider the request for interim release of the goods within one week.
  • No auction of the goods shall take place until the authority decides the request for interim release.
  • The statutory appeal shall be disposed of within eight weeks.
  • The Court clarified that none of its observations shall prejudice either party during appellate proceedings.

Accordingly, the writ petition was disposed of with the above directions.

 

Important Clarification

  • Even after confiscation proceedings under Section 130, the statutory appellate remedy remains the primary remedy available to the aggrieved taxpayer.
  • Issuance of an auction notice may constitute a fresh cause of action enabling limited intervention by the High Court.
  • Courts may grant interim protection against auction where the taxpayer promptly approaches the appellate authority and complies with statutory pre-deposit requirements.
  • Authorities should expeditiously consider applications for interim release of detained goods pending disposal of statutory appeals.

Sections Involved

  • Section 129 of the Central Goods and Services Tax Act, 2017 – Detention, Seizure and Release of Goods and Conveyances in Transit.
  • Section 130 of the Central Goods and Services Tax Act, 2017 – Confiscation of Goods or Conveyances and Levy of Penalty.
  • Relevant GST MOV Forms:
    • GST MOV-06
    • GST MOV-10
    • GST MOV-11


Link to download the order -

https://www.mytaxexpert.co.in/uploads/1782970967_92compressed.pdf

 

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