D.K. Enterprises VS Assistant/Deputy Commissioner (ST) Adjudication, Intelligence-I

1.The petitioner has sought a mandamus directing the respondents to release the goods, being a consignment of Polystardone XL-10 (consignment/consignment in question), stated to be a life-saving drug, cleared from Chennai Seaport Customs and seized/detained on 13.08.2022 at 2.15 a.m. by the Roving Squad of the Commercial Taxes Department together with the Conveyance/Lorry bearing Registration No.TN 28 AP 9239, forthwith.

2. The prayer of the petitioner for release of consignment might not be required in this case, as upon a detailed hearing of Mr.Baskaran, learned counsel for the petitioner and Mr.C.Harsha Raj, learned Additional Government Pleader for the respondents, I am of the categoric view that there has been no detention that has even been ordered.

3. Let us see the facts in issue:

i) The consignment in question was intercepted on 13.08.2022 at 2.15 a.m. and immediately upon interception, statement of the driver in Form GST MOV-01 was issued on the same day.

ii) Simultaneous there with, Form GST MOV-02, being an order of physical verification/inspection of the conveyance, goods and documents, was also issued.

iii) The reason for interception was the presumption of the officer that the goods were proposed to be unloaded at an unregistered place. No reasons or details in respect of this assumption are assigned.

iv) In any event, since in this order, I am solely concerned with the integrity of the procedure followed by the respondents in matters of detention, serious lapses coming to my attention in the course of the hearing, the facts in relation to the alleged discrepancies in conveyance are not relevant and are not alluded to, except as required.

v) On 13.08.2022, Form GST MOV – 04, being physical verification report was also issued.

vi) Thereafter, there has been no notice issued by the respondents in terms of Section 129 (3) of the Goods and Services Tax Act, 2017 (in short ‘Act’) requiring a show cause notice to be issued within 7 days from date of detention/seizure and hence this Writ Petition.

vii) In the meantime, on 17.08.2022, the petitioner has made a representation requesting that the conveyance be permitted to proceed on its way and setting out an explanation for the alleged discrepancy that has been noted by the officer.

viii) According to the petitioner, the time frames that have been set out under the Act, particularly Section 129(1) proviso and 129(3) have not been adhered to in the present case.

ix) No order of detention has been passed without which the consignment ought not to have been retained by the authorities, upon interception. This is in contravention of the proviso to Section 129(1), that reads as follows:

129. Detention, seizure and release of goods and conveyances in transit.— (1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,––

(a) [ on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;

(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;]

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:

Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

(2) [*******]

(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).

. . . .

x) That apart, Section 129(3) requires a notice to be issued within 7 days, stipulating the penalty payable for the alleged discrepancy and in this case, no notice was issued till 24.08.2022, when notice ostensibly dated 22.08.2022, has been sent, produced in the course of hearing.

xi) The learned Additional Government Pleader has produced an order of detention and show cause notice, under Section 129(3), both dated 22.08.2022.

xii) In light of the above, the petitioner argues that there has been no proper procedure followed, in any event, none, in line with the statutory prescription and the actions of the respondents have been irregular and contrary to the Statute and Regulations.

4. Learned Additional Government Pleader circulates a copy of Circular No.41/15/2018 – GST dated 13.04.2018 in CBEC-20/16/-3/2017-GST, issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing and draws my attention to the following procedure to be followed, as per the Circular. He would emphasize on the point that there is no statutory prescription for any of the Forms that are referred to in Section 129. The entirety of the procedure followed, and the Forms issued post interception, are only as per the mandate of the Circular issued by the Commissioner under Section 168 of the Act.

5. Though cumbersome, the entirety of the instructions in Circular dated 13.04.2018 are extracted below, as being instructive in other cases of this nature:

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