Facts of the Case

M/s Doaba Steel Rolling Mills Pvt. Ltd. filed a writ petition under Articles 226 and 227 of the Constitution seeking release of its goods and conveyance detained by the GST authorities in Punjab. The goods, TMT bars covered by invoices issued to M/s Garg Iron Traders, Kapurthala and M/s Goldrange Casting Pvt. Ltd., Jalandhar (both dated 18.09.2023), were detained and a notice in Form MOV-10 was issued proposing confiscation of the goods and conveyance, the Department alleging that the description of goods physically loaded in the vehicle did not match the corresponding purchase invoice, indicating a non-genuine transaction with intent to evade tax. On an earlier hearing (03.10.2023), the Court had passed interim directions permitting release upon payment of 25% of the fine and penalty amount in cash and furnishing a personal/surety bond for the balance. The Department, in its reply, stated that the petitioner had appeared before the Assistant Commissioner, State Tax, and that a speaking order would be passed under Section 130 of the CGST/PGST Act, against which an appeal remedy would be available. By the time of the present hearing, the petitioner had complied with the interim directions and the vehicle, along with the goods, had already been released.

Issues Involved

  1. Whether the writ petition survived for adjudication once the goods and conveyance had already been released pursuant to the Court's interim directions.
  2. Whether any further relief was warranted at the writ stage pending the Department's proposed speaking order under Section 130.

Petitioner's Arguments

  • Sought release of the detained goods and conveyance on furnishing security, and confirmed that in pursuance of the interim directions, necessary payment had been made and the vehicle, along with the goods, had already been released.

Respondent's Arguments

  • The mismatch between the goods physically loaded (TMT bars) and the description in the corresponding purchase invoice indicated that the transaction was not genuine and that the movement of goods was initiated with intent to evade tax.
  • The petitioner had appeared before the Assistant Commissioner, State Tax, pursuant to the Court's earlier order, and a speaking order would be passed under Section 130 of the CGST/PGST Act, against which the petitioner could avail the statutory appeal remedy.

Court Order/Findings

  • Since the vehicle and goods had already been released pursuant to the earlier interim directions after payment of the requisite amount, the exigency underlying the writ petition stood addressed, and the Court disposed of the petition on that basis, without adjudicating the correctness of the Department's allegation of a non-genuine transaction.
  • The petitioner was left at liberty to pursue his remedy against the forthcoming Section 130 order in accordance with the law laid down in State of Punjab v. M/s Shiva Enterprises and others, 2023 (96) GST 120.

Important Clarification

  • Where interim release of detained goods and conveyance has already been secured on furnishing part-payment and security, a writ petition seeking that very release becomes infructuous, and any challenge to the eventual confiscation order under Section 130 must be pursued through the statutory appellate mechanism rather than by reviving the same writ.

Sections Involved

  • Section 129, CGST/PGST Act, 2017 — detention and release of goods and conveyances in transit.
  • Section 130, CGST/PGST Act, 2017 — confiscation of goods or conveyances and levy of penalty.
  • Form GST MOV-10 — notice for confiscation of goods or conveyance and levy of penalty.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee — the goods and conveyance stood released pursuant to interim compliance, but the correctness of the alleged tax evasion and the forthcoming Section 130 confiscation order were left open, to be pursued through the statutory appellate remedy.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

Court: High Court of Punjab and Haryana at Chandigarh
Case No.: CWP-21950-2023 (O&M)
CNR: Not available
Coram: G.S. Sandhawalia, J. and Lapita Banerji, J.
Decision Date: 20-12-2023
Disposal Nature: Disposed of (goods and conveyance released)

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