Gujarat HC releases Goods detained by GST Department for want of E-Way Bill [Read Order]

The Gujarat High Court has ordered the GST Department to release goods and consignments which is detained for not carrying E-Way Bill is a result of the wrong interpretation of section 130 of the GST Act.

The Court was of the opinion that to issue a notice of confiscation u/s 130 of the Act, mere suspicion may not be sufficient to invoke Section 130 of the Act straightway. The Court issued such. Ruling in two different issues with the same appeal.

The appellants’ trucks with goods were stopped by the authorities on the GST department absence of an e-way bill in respect of the goods and notices were served on the transporter and a penalty was served on them under section 130.

The issues before the Court in both cases were:

• Whether proceedings for confiscation (S. 130) can be initiated without first following the procedure laid down under Section 129 of the CGST  Act?
• Whether procedure and proceedings for confiscation (S. 130) are permissible even after the procedure of Section 129 of the Act was followed i.e., the amount referred in sub-section (1) was paid by the concerned person?
• Whether it is permissible in law to order confiscation once they are released under Section 129 of the Act on payment of the amount of tax and penalty i.e. when the authority was not in physical possession of both?

The Court relied on its own judgment in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat wherein the Bench constituting of Justices J.B. Pardiwala and A.C. Rao held, “On the interpretation of Sections 129 and 130, the Court held that both the sections start with a non-obstante clause, yet, the harmonious reading of the two sections, keeping in mind the object and purpose behind the enactment thereof, would indicate that they are independent of each other.” Taxscan had reported earlier the observations of the court in the matter where the court shared the opinion that the Legislature should look into both the provisions, i.e. Sections 129 and 130 of the Act and amend the Sections accordingly to remove certain inconsistencies in the two provisions.