1. On 7.10.2019 while issuing notice, this court had recorded as under:-

“Mr. Maulik Vakhariya, learned advocate for the petitioner invited the attention of the court to the tax invoice dated 23.9.2019 and e-way bill dated 23.9.2019, to submit that the driver of the vehicle in question, which was carrying perishable goods in the nature of groundnut seeds, possessed both the invoice as well as the e-way bill and had produced the same at the time when the vehicle in question came to be intercepted which is evident from FORM GST MOV-01 dated 25.9.2019 issued by the State Tax Officer, Mobile Squad, Songadh. It was submitted that thereafter FORM GST MOV-02 came to be issued for physical verification of the goods in question.

The attention of the court was invited to Circular No.41/15/2018-GST dated 13.4.2018 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, to point out that it is duly provided therein that within a period of three working days from the date of issue of the order in FORM GST MOV-02, the proper officer shall conclude the inspection proceedings, either by himself or through any other proper officer authorised inthis behalf. It was pointed out that the circular further provides that on completion of the physical verification/inspection of the conveyance and the goods in movement, the proper officer shall prepare a report of such physical verification in FORM GST MOV-04 and serve a copy of the said report to the person in charge of the goods and conveyance. The proper officer shall also record on the common portal, the final report of inspection in Part B of FORM GST-EWB-03 within three days of such physical verification/inspection. It was submitted that in the present case, no report of such physical verification in FORM GST MOV-04 has been served upon the petitioner nor has the final reportof inspection been recorded on the common portal. It was submitted that, therefore, it is evident that no discrepancieshave been found after inspection of the goods and conveyance, and hence, in terms of the said circular, the proper office is forthwith required to issue a release order in FORM GST MOV-05 and allow the conveyance to move further. It was further submitted that in the present case without following the procedure as provided in the circular, after three days of intercepting the goods, FORM GST MOV-06 has been issued detaining the goods in question under section 129 of the Central Goods and Services Tax Act, 2017 and related statutes.

2. Reference was also made to Circular No.64/38/2018-GST dated 14.9.2018, to point out that it is specifically provided therein that in case the consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated. It was submitted that in the present case, there is no discrepancy in the invoice as well as the e-way bill, and hence, there was no necessity of issuance of an order of detention under section 129 of the CGST Act.”

2. Today, when the matter came up for hearing, the learned advocate for the petitioner again invited the attention of the court to the circular dated 13.4.2018 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing wherein it has been provided that the proper officer, empowered to intercept and inspect a conveyance, may intercept any conveyance for verification of documents and/or inspection of goods. On being intercepted, the person in charge of the conveyance shall produce the documents related to the goods and the conveyance. The proper officer shall verify such documents and where, prima facie, no discrepancies are found, the conveyance shall be allowed to move further.

It was submitted that in the facts of the present case, the person in charge of the conveyance had duly produced the invoice as well as the e-way bill and no discrepancies were found therein. Reference was made to clause (d) of the circular which provides that where the person in charge of the conveyance fails to produce any prescribed document or where the proper officer intends to undertake an inspection, he shall record a statement of the person in charge of the conveyance in Form GST MOV-01. In addition, the proper officer shall issue an order for physical verification/inspection of the conveyance, goods and documents in Form GST MOV-02, requiring the person in charge of the conveyance to station the conveyance at the place mentioned in such order and allow the inspection of the goods. It was submitted that to this extent, the procedure as provided in the circular has been followed. It was pointed that the circular further provides that the proper officer, shall within 24 hours of the aforementioned issuance of Form GST MOV-02, prepare a report in Part–A of Form GST EWB-03 and upload the same on the common portal. It was submitted that the proper officer has not prepared any such report and in case such report has been prepared, the same has not been furnished to the petitioner and has not been uploaded on the common portal. It was pointed out that by virtue of clause (f) of the circular, on completion of the physical verification/ inspection of the conveyance and the goods in movement, the proper officer shall prepare a report of such physical verification in Form GST MOV-04 and serve a copy of the said report to the person in charge of the goods and conveyance. The proper office shall also record on the common portal, the final report of the inspection in Part-B of Form GST EWB-03 within three days of such physical verification/inspection. It was submitted that no such report of physical verification in Form GST MOV-04 has been served upon the petitioner till date. It was submitted that in view of clause (g) of the circular, where no discrepancies are found after the inspection of the goods and conveyance, the proper officer shall forthwith issue a release order in Form GST MOV-05 and allow the conveyance to move further.

It was submitted that in the present case, without preparing a report of physical verification in Form GST MOV-03 and Form GST MOVPage 04, the officer concerned has straightaway issued an order of detention in Form GST MOV-06. It was submitted that therefore, the procedure required under the circular has not been followed prior to passing the order of detention under section 129 of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’).

3. On the other hand, Ms. Maithili Mehta, learned Assistant Government Pleader invited the attention of the court to the Form GST MOV-06 to point out the nature of the irregularities detected by the proper officer. She however is not in a position to produce Form GST MOV-03 or Form GST MOV-04 prepared by the proper officer after physical verification of the goods contained in the conveyance. It appears that no such report has been prepared by the proper officer and without abiding by the provisions of law and the instructions contained in the circular dated 13.4.2018, the proper officer has straightaway issued the order of detention under section 129 of the CGST Act.

4. Having regard to the fact that the person in charge of the conveyance had produced the e-way bill as well as the invoice, the only ground on which the conveyance could have been detained was in case any discrepancies were found in the inspection of the goods and conveyance. However, in the facts of the present case after detaining the vehicle, no physical verification report has been submitted by the concerned officer and uploaded in the common portal, though required in accordance with the instructions issued by the Board. Under the circumstances, the order of detention under section 129 of the CGST Act, prima facie, is not sustainable.

5. Under the circumstances, issue rule, returnable on 24.10.2019. By way of interim relief, the respondents are directed to forthwith release the conveyance in question together with the goods contained therein.

6. Direct service, is permitted.