The Gujarat High Court set aside the order passed by the GST department, confiscating a truck and its goods without following the mandatory process. As per the facts of the case, Jamnagar based Isha Trading company dispatched brass electrical parts to Delhi-based purchaser via Gujarat Goods Carrier.
When the truck was intercepted by the GST officer at Soyal toll, the driver furnished the e-way bill, invoice and lorry receipt. Even though the driver furnished all the required documents, the officer detained the truck on the ground that the genuineness of the goods in transit and/or submitted documents required further verification.
The officer issued Form GST MOV-02 for physical verification of the goods. But no report in Part A of Form GST EWB-03 has been uploaded on the portal or no report in Form GST MOV-04 of physical verification has been furnished to the petitioner.
Further, the GST officer made a preliminary verification of the dealer and found that 42 e-way bills had been generated in December 2018, wherein, IGST has been shown as Rs.3,64,30,800 and it appears that, dealers have not paid the same or that the purchases are not genuine.
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The officer proceeded further and issued a notice under section 130 of the CGST Act in Form GST MOV-10, and has thereafter, passed an order of confiscation under section 130 of the Act in Form GST MOV-11.
Nothing prevents the GST officer from taking appropriate action against the assessee in accordance with law under the relevant provisions of the CGST Act. But, the reason for passing such an order has got nothing to do with the goods and conveyance initially detained.
The petitioner invited the attention of the court to the Circular No. 41/15/2018-GST dated 13.04.2018, issued by the Central Board of Indirect Taxes and Customs, where the Board has prescribed the procedure to be followed by the proper officer.
The circular states that, upon verification of the documents and on verification of the goods, if no discrepancy is found, the conveyance shall be allowed to move further. In the absence of any discrepancy having been noticed by the proper officer, it was not permissible for the officer to detain the conveyance.
However, when the conveyance in question was carrying the goods which were duly accompanied by documents and no discrepancy was found in connection therewith, there was no reason for the GST officer to confiscate the same. The order of confiscation passed by the GST officer under section 130 of the CGST Act, therefore, cannot be sustained.
The order dated 08.04.2019 issued by the GST officer under section 130 of the CGST Act as well as the order of demand of tax and penalty dated 29.01.2019 has been quashed and set aside and the GST officer is directed to forthwith release the conveyance and goods in question.
For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
