Facts of the Case

The petitioner, Blue Bell Jewellers, challenged a Form GST MOV-10 notice dated 19.07.2023 issued by the second respondent, proposing confiscation of goods under Section 130 of the CGST Act. Various delivery challans and tax invoices relating to gold ornaments sent to jewellers in Karur and Trichy for selection purposes were seized, along with a purity-test inventory and a statement recorded from the petitioner's partner. The petitioner had submitted a reply on 22.07.2023 to the MOV-10 notice, which remained pending consideration. An earlier interim order dated 01.08.2023 recorded the Senior Government Pleader's submission that confiscation proceedings would not be finalised before the next hearing.

Issues Involved

  1. Whether the pending Form GST MOV-10 notice should be finally decided by the department after considering the petitioner's reply and hearing, without the Court itself intervening in the merits.
  2. Whether the petitioner should be permitted to reserve, for a separate or later occasion, its right to challenge the constitutional validity of Section 130 of the CGST Act.

Petitioner's Arguments

  • The petitioner confined the writ petition to seeking a direction to the second respondent to consider and dispose of the pending MOV-10 notice after taking into account the reply already filed and after affording an opportunity of hearing, while expressly reserving the right to challenge the constitutional validity of Section 130 of the CGST Act on a future occasion.

Respondent's Arguments

  • The Senior Government Pleader had earlier assured the Court that confiscation proceedings would not be finalised until the matter was next listed, and did not oppose a direction for timely and reasoned disposal of the pending notice.

Court Order / Findings

  • The Court, considering the pleadings, the interim order dated 01.08.2023, and the fact that the petitioner's reply dated 22.07.2023 remained pending consideration, directed the second respondent to consider and finalise the MOV-10 notice after adverting to the petitioner's reply and after affording an opportunity of hearing, in order to render complete justice to both sides.
  • The second respondent was directed to dispose of the show cause notice within two weeks from receipt of a certified copy of the judgment.
  • The Court expressly clarified that the petitioner's right to challenge the constitutional validity of Section 130 of the CGST Act was reserved and left open.

Important Clarification

Where a Section 130 confiscation notice (Form GST MOV-10) is challenged primarily on procedural grounds — such as the department's failure to consider a timely reply — courts will typically direct expeditious, reasoned disposal after hearing, rather than deciding the merits themselves, while expressly preserving the taxpayer's right to separately challenge broader constitutional questions, such as the vires of Section 130, at a later stage.

Sections Involved

  • Section 130, CGST Act, 2017 — provides for confiscation of goods or conveyances and levy of penalty for specified contraventions, whose constitutional validity was left open for future challenge.
  • Form GST MOV-10 — the prescribed notice proposing confiscation of goods/conveyance under Section 130.
  • Article 226, Constitution of India — the writ jurisdiction invoked to secure timely and fair disposal of the pending notice.

Decision – In Favour of

The decision is disposed of with directions: the petitioner secured a direction for timely, reasoned disposal of the confiscation notice after hearing — a procedural relief in its favour — while the substantive question of Section 130's validity remains open for another day.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WP(C) No.25063 of 2023
Coram: Justice C. S. Dias
Date of Order: 03.08.2023

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