Gujarat HC Declines to Interfere in Confiscation Proceedings Under Section 130 of CGST Act; Directs Assessee to Statutory Appellate Route

5-Second Takeaway

The Gujarat High Court dismissed a writ petition challenging an order of confiscation under Section 130 of the CGST Act, ruling that the proper officer had valid jurisdiction under Rule 138B of the CGST Rules. The Court emphasized that issues regarding the non-supply of relied-upon documents must be addressed through the statutory appellate mechanism under Section 107 of the CGST Act.

Facts of the Case: The petitioner, a trader in scrap iron, purchased goods that were intercepted during transit. The State Tax Officer verified the vehicle, issued a detention order (Form GST MOV-6), and subsequently issued a show-cause notice (Form GST MOV-10) proposing confiscation of the goods and conveyance, along with penalties and fines. After an initial round of litigation where the High Court remanded the matter, the respondent issued a fresh show-cause notice. The petitioner replied but did not attend the personal hearing, leading to an adjudication order confirming the confiscation and demand. The petitioner challenged this order in a writ petition, arguing a lack of jurisdiction and a violation of natural justice due to the non-supply of relied-upon documents . The respondent countered that the supplier was found to be a bogus entity with a cancelled registration.

Issue: Whether a writ petition challenging a confiscation order under Section 130 of the CGST Act can be entertained when the petitioner alleges a lack of jurisdiction under Rule 138B of the CGST Rules and non-supply of documents, despite the availability of a statutory appeal under Section 107 of the Act?

Held:

The Court held that the physical verification of the conveyance was lawfully carried out by a proper officer authorized by the Commissioner, satisfying the requirements of Rule 138B of the CGST Rules. Therefore, the claim of excess of jurisdiction was rejected.

The Court found no violation of the principles of natural justice, noting that the petitioner was issued the necessary forms (MOV-04, MOV-06, MOV-10), supplied with documents relating to the supplier's cancelled registration, and afforded an opportunity for a personal hearing, which it did not attend.

The Court ruled that grievances regarding the alleged non-supply of relied-upon documents are matters arising from the adjudicatory record and fall squarely within the appellate framework. Relying on Supreme Court and Delhi High Court precedents, the Court dismissed the writ petition, directing the petitioner to pursue the alternative statutory remedy under Section 107 of the CGST Act.