Synergy Fertichem (P.) Ltd. VS State of Gujarat

The court proceedings began with Mr. Soham Joshi, the Assistant Government Pleader, agreeing to waive service of notice of the rule on behalf of the respondents, leading to the rule being returnable forthwith. To streamline the process, Special Civil Application No.4730 of 2019 was designated as the lead matter. The writ applicants sought relief through a writ application under Article 226 of the Constitution of India. They specifically requested the court to issue a writ of mandamus or any appropriate writ, order, or direction to quash and set aside a notice dated 1.3.2009 (annexed at Annexure A).

interim order for detention of the goods and conveyance, if he is of the opinion that such detention is necessary to protect the interest of revenue. It was further pointed out that after the goods and the conveyance is detained, the officer is required to pass a final order within fourteen days of the detention of the goods and conveyance. It was also pointed out that under section 130 of the Act, the officer is required to pass an order for confiscation of the goods and conveyance if he is of the opinion that the provisions of the Act or the rules made thereunder have been contravened and he is also required to impose a penalty equivalent to the tax evaded or to be evaded on such goods. It was also pointed out that under the first proviso to section 130 of the Act, the officer is also required to give an option to the person concerned to pay in lieu of the confiscation of the goods and conveyance, a fine equal to the market price of such goods and conveyance as reduced by the tax amount chargeable thereon. It was further pointed out that under the second proviso to section 130 of the Act, if the person concerned does not exercise the option to pay the fine in lieu of the confiscation of the goods and the conveyance, the officer is required to pass an order for confiscation of the goods and conveyance. It was also pointed out that under the third proviso to section 130 of the Act, the officer is also required to give an option to the person concerned to pay in lieu of the tax amount payable on such goods and conveyance, a fine equal to fifty per cent of such tax amount. It was submitted that the respondent authorities have not followed the procedure prescribed under the provisions of the Act.

2. Considering the facts and circumstances of the case, issue notice returnable on 15.03.2019.”

3. Heard Mr. Uchit Sheth, learned advocate for the petitioners and Mr. Soham Joshi, learned Assistant Government Pleader for the respondents.

4. The petitioners have prayed for the following reliefs; “(A) This Hon’ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ, order or direction quashing and setting aside notice dated 1.3.2009 (annexed at Annexure A) issued (B) This Hon’ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order directing the learned Respondent authorities to forthwith release goods with truck no.GJ-07-UU-7250 by quashing and setting aside the detention notices/orders issue for such purpose (annexed at Annexure F); (C ) Pending notice, admission and final hearing of this petition, this Hon’ble Court may be pleased to direct the learned Respondent authorities to forthwith release goods with truck no. GJ-07-UU-7250 detained/seized in purported exercise of powers under Section 129 and 130 of the GST Acts; (D) Ex parte ad interim relief in terms of prayer C may kindly be granted; (E) Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioners shall forever pray.”

2. Mr. Sheth, learned advocate for the petitioners submits that the respondents have detained the goods in contravention of the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) and the Rules framed thereunder.

3. He submits that the respondents have not followed the procedure prescribed under the provisions of sections 129 and 130 of the CGST Act. He submits that even though the respondents have detained the goods and the conveyance, as contemplated under section 129 of the CGST Act, they have not passed any final order within fourteen days of the detention of the goods and the conveyance, as contemplated under the said section.

4. He further submits that even though the respondents have detained the goods and the conveyance, they have not given any option to the petitioners to pay in lieu of the confiscation of the goods and the conveyance, a fine equal to the market price of such goods and the conveyance as reduced by the tax amount chargeable thereon, as contemplated under the first proviso to section 130 of the CGST Act.

5. He submits that the respondents have only given an option to the petitioners to pay in lieu of the tax amount payable on such goods and the conveyance, a fine equal to fifty per cent of such tax amount, as contemplated under the third proviso to section 130 of the CGST Act. He submits that the respondents have not given an option to the petitioners to pay in lieu of the confiscation of the goods and the conveyance, a fine equal to the market price of such goods and the conveyance as reduced by the tax amount chargeable thereon, as contemplated under the first proviso to section 130 of the CGST Act.

6. He submits that the respondents have also not given any option to the petitioners to pay in lieu of the tax amount payable on such goods and the conveyance, a fine equal to fifty per cent of such tax amount, as contemplated under the third proviso to section 130 of the CGST Act. He submits that the respondents have not followed the procedure prescribed under the provisions of the CGST Act.

7. He submits that the respondents have detained the goods and the conveyance illegally and without any authority of law.

8. Mr. Joshi, learned Assistant Government Pleader for the respondents, on the other hand, submits that the petitioners have not made out any case for interference by this Court.

9. He submits that the respondents have detained the goods and the conveyance in accordance with the provisions of sections 129 and 130 of the CGST Act and the Rules framed thereunder.

10. He submits that the respondents have followed the procedure prescribed under the said provisions.

11. He submits that the respondents have given an option to the petitioners to pay in lieu of the confiscation of the goods and the conveyance, a fine equal to the market price of such goods and the conveyance as reduced by the tax amount chargeable thereon, as contemplated under the first proviso to section 130 of the CGST Act.

12. He submits that the respondents have also given an option to the petitioners to pay in lieu of the tax amount payable on such goods and the conveyance, a fine equal to fifty per cent of such tax amount, as contemplated under the third proviso to section 130 of the CGST Act.

13. He submits that the respondents have not detained the

The proceedings commenced with Mr. Soham Joshi, acting as the Assistant Government Pleader, waiving the service of notice of rule for the respondents. Special Civil Application No.4730 of 2019 was designated as the lead matter for convenience.

The writ applicants sought various reliefs under Article 226 of the Constitution of India. These included quashing and setting aside a notice dated March 1, 2009, releasing detained goods with a specific truck number, and seeking interim relief until the final hearing. They also prayed for any further relief deemed fit in the interest of justice.

The court acknowledged a previous order from March 8, 2019, which highlighted the procedures outlined in sections 129 and 130 of the Central Goods and Services Tax Act, 2017 (CGST Act). The order emphasized the necessity of following proper procedures before resorting to penalties under section 130. It also noted that integrated goods and services tax had already been paid on the goods in question, which were perishable with a limited shelf life.

In response to this order, Mr. Soham Joshi appeared on behalf of the respondents. He referred to a detention order dated February 14, 2019, issued under section 129(1) of the CGST Act, stating that the goods lacked an Eway bill during transit, justifying the detention.

Section 129(3) of the CGST Act stipulates that the proper officer must issue a notice specifying the tax and penalty payable and then pass an order for payment. Subsection (4) mandates providing the concerned person with an opportunity to be heard before determining tax, interest, or penalty.

The case involves a show cause notice dated [date not provided], initiating proceedings under section 130 of the CGST Act. However, it was argued that this was impermissible without first adhering to section 129 procedures.

The matter pertains to the legality of the detention order and subsequent proceedings under the CGST Act. The court is tasked with determining whether proper procedures were followed and if the detention and subsequent actions were justified under the law.

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