Competent  Authority to release confiscated goods  &  vehicle  without penalty since  no valid  ground  for  detention

Insha Trading Company v.  State of Gujarat[2019] 112 taxmann.com 175(Guj.)

The Competent   Authority detained the goods and vehicle of the assessee and  imposed tax  and  penalty  upon  assessee . The Competent Authority  also  passed an order  for confiscation of the  goods  of assessee and  conveyance.

The  assessee filed a writ  before  High  Court of Gujarat.

The Honourable Court observed that when conveyance of assessee was inter-cepted , driver had duly produced the e-way bill  and invoice to goods  transported.

The Competent  Authority  did  not point  out  any discrepancy in  the  e-way bill or the tax  invoice . However if the Competent Authority desired to carry out physical verification of  conveyance goods  and  the  documents it  was  permissible for it to detain the conveyance .

Under GST when conveyance was detained  for  inspection the  Competent Authority  was  required  to prepare  a report in form GST EWB-03 and upload  the same on the GST portal within 24  hours  from  issuance  of order  for  physical  verification.

On completion  of  physical  verification , the said Authority  was also required to prepare  a report  in form GST MOV-04 to be  served  on  person in  charges  of the  goods  as well  as  conveyance and  final  report of  inspection  in  Part B  Form  GST EWB-03 within 3 day  of  such   physical verification.

In the given  case  no  such  reports were prepared  by  the Competent Authority.  Thus  it   appeared that  though  the  vehicle was  detained for  carrying out  inspection , on  such  inspection  was  carried  out   or  that  upon   physical  verification  no  discrepancy was  found in the  conveyance  goods  or  documents .

In the  reply  furnished by the Competent  Authority  there  was no  mention  of any  discrepancy  found after  verification .

Hence there  was  no valid  ground  for  detention of the  Competent Authority .

Therefore  levy  of tax  and penalty  in  relation  to confiscation of goods  and  vehicle   did not  arise .The  Honourable  Court set  aside the  confiscation  order  and    also  quashed  order  of tax   and  penalty . The court directed  Competent  Authority to  release goods  and vehicle  of the  assessee.

Thanks & Regards

CA Rahul Gupta

RVG & Co

support@carahulgupta.com