1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs;
“(A) Your Lordship may be pleased to admit and allow this writ petition.
(B) The Hon’ble Court may be pleased to issue writ of mandamus, or any other appropriate writ, order or direction quashing and setting aside the impugned order under Section 129 in Form GST MOV 06 dated 10.08.2020 as being illegal, arbitrary, without jurisdiction and unconstitutional.
(C ) The Hon’ble Court may be pleased to issue writ of mandamus, or any other appropriate writ, order or direction quashing and setting aside the impugned notice UNDER Section 130 in Form GST MOV 10 dated 10.08.2020 as being illegal, arbitrary, without jurisdiction and unconstitutional.
(D) The Hon’ble Court may be pleased to direct the release of goods seized by the Respondent authorities.
(E) The Hon’ble Court may be pleased to direct the release of vehicle no.HR38Q7370 seized by the Respondent authorities.
(F) Pending admission, hearing and final disposal of this petition, Lordship may be pleased to grant interim as well as Ad-interim reliefs and thereby stay the proceedings initiated vide impugned notice under Section 130 dfated 10.08.2020.
(G) Pending admission, hearing and final disposal of this petition, Lordship may be pleased to grant interim as well as Ad-interim reliefs and thereby direct the release of goods seized by the Respondent authorities.
(H) Pending admission, hearing and final disposal of this petition Lordship may be pleased to grant interim as well as Ad-interim reliefs and thereby direct the release of vehicle no HR38Q7370 detained by the Respondent authorities.
(I) Cost of the Proceedings to the Petitioner.
(J) Your Lordship may kindly be pleased to pass any other further orders as deemed fit just and proper in the facts and circumstances of the case and in the interest of justice.”
2. We need not go much into the facts of this litigation as we are of the view that this writ application can be disposed of on a short ground.
3. It appears from the materials on record that the writ applicant is in the business of Areca Nuts. He received a letter from a party, situated at Delhi for supply of Areca Nuts. Three invoices being the Invoice Nos.29, 30 and 31 respectively dated 01.08.2020 were generated for the purpose of supply of the goods to the party stationed at Delhi. The goods were loaded in a vehicle bearing No. TN 50AA3666 from Kasaragod. E-way bills were generated on 01.08.2020 for all the invoices referred to above.
4. The respondents intercepted the vehicle at 8:30 p.m. at Songadh-Surat Road and issued Form MOV-01. The goods and the truck came to be seized under Section 129 of the GST Act, 2017. In the Form GST MOV-06, which is at Page-14, Annexure-A to this paper-book, the following discrepancies have been shown upon physical verification of the goods and the conveyance.
1. As per written statement given by in charge of conveyance/driver Murali Muragaiyan the goods in movement i.e. Areca Nuts is to be delivered partly at Surat City and remaining at Rajkot, which is the matter of wrong delivery as both e way bill shows the delivery at Rajkot.
2. According to the investigation report of the place of business, the place of business is located in a small shop in a narrow alley on the first floor. Whereon no business board of any kind has been displayed. No person, business owner or any authorized person on behalf of their firm was found present at the place of business. No stock of any item was found from the place of business and no books of accounts was found. Contacting the taxable person telephonically, he said that he could not come at present and he had not made any outword supply outside Gujarat.
3. GSTIN of supplier has not been mentioned in invoice No.29 and No.30
4. As per invoice tendered by person in charge of the conveyance there is total quantity of 19045 kgs of Areca Nuts total value of ₹ 41,33,084/- and E-way bill generated for the same.
As per physical verification, excess quantity of Areca Nut of 5000 kgs is found. For this goods no any required document like as invoice, Delivery Challan and LR were not tendered by person in charge of conveyance and dealer has not generated E-Waybill for excess quantity of such goods.
According to statement given by the person in charge of conveyance, such excess quantity of goods were loaded from SHREE KATEEL PROCESSING UNIT having GSATIN: 32FUFPD865681ZU, KASARGOD, KERALA and to be delivered at Surat City.
5. In addition, checking the registration details of the receipt, it appears that BASIYA TRADING GSTN: 24AVGPBD2621120 is effective from 24.01.2020. No additional place of business is indicated. The taxable person has indicated HSN Code 21069020, 21069030, 09092110 and 0910 for outward supply. While the taxable person seems to have made supply only Areca Nut (HSN Code: 0802).
6. The GSTR-3B has been filled Nil in the first month of the taxable person’s registration number i.e., January, 2020 . In February, 2020, the total outward supply is shown at ₹ 3,00,88,030/- and the total payable as CGST and SGST is ₹ 15,04,00/-. Out of which sales of ₹ 2,69,22,455/- are shown to be URP in B2C ITC of IGST ₹ 16,50,424/- has been claimed in GSTR-3B. During the same period, according to the inward report of E-way bill, a total of 34 e-way bills of ₹ 3,30,08,495/-. Among the sale made to registered dealers in Gujarat during this month are (1) ANKIT LIVE ANGRO GSTN: 24CKYPP3052P12A, which was registered from 04.02.2040. Which has been cancelled by the taxable person from 19.03.2020. (2) SURYA ENTERPRISE GSTIN:24AMMPT0243Q121 which was registered from 31.03.2020 Which has been cancelled by the taxable person from 19.03.2020. So these transactions also seem suspicious.
7. This month, the taxable person has claimed IGST’s ITC ₹ 18,87,083/– ITC. During this month, according to the inward report of E-way bill, a total of 40 e-way bills of ₹ 3,77,41,665/- have been generated. While a total of 70 outward e-way bills of ₹ 3,02,78,367/- have been generated in the month of March, 2020, according to GSTR-3B of BASIYA TRADING, outward supply of ₹ 3,12,88,017/- has been shown. IGST ₹ 9,90,036/- Payable is indicated. According to the Outward E-way Bill Report of the taxable person, supply of Areca Nut (HSN Code 0802) appear to have taken place from Rajkot to Chennai during this period. Which seems doubtful.
8. As per GSTR-3B of BASIYA TRADING in April, 2020, the outward supply is Nil. When ITC claimed ₹ 8.04,368/-. During this month, according to the inward report of E-way Bill, a total of 11 e-way bills of ₹ 1,60,87,370/- have been generated. While Outward’s e-way bill is Nil. Despite the lockdown due to COVID-19 this month, the taxable person appears to have generated an inward supply e-way bill without actually receiving the goods to claim ITC.
9. This month, the taxable person has claimed IGST’s ITC ₹ 1,86,173/- . During this month, according to the inward report of E-way bill, a total of E-way bills of ₹ 37,23,460/- have been generated. While a total of 7 outward e-way bills of ₹ 2,45,63,175/- have been generated. As per GSTR-3B of BASIYA TRADING in May, 2020, the outward supply is down of ₹ 2,45,63,175/-. According to the Outward W-way Bill Report of the taxable person, supply of Areca Nut (HSN Code: 0802) appear to have taken place from Rajkot to Kasaragod, Kerala during this period. Which seems doubtful.
10. During this month, according to the inward report of E-way bill, a total 65 E-way bill of ₹ 3,35,60,653/- has been generated. While a total of ₹ 85 outward e-way bills of ₹ 1,44,51,677/- and the total payable as CGST and SGST is ₹ 8,01,558/-. All supply is shown in 82C to URP.
Which seems doubtful.
11. The E-mail address [email protected] given by the taxable person in his registration is used in the registered taxable person MAHAMAYA TRADING GSTIN: 22ADAPY2327DZZY in Chhatisgarh.
Which has registration number from 27.03.2020.
The taxable person’s inward supply appears to have been made from Kerala and Karnataka. Although Areca Nut is usually produced in the state of South India, the taxable person has made supply of Areca Nuts worth ₹ 4,65,82,096/- from Rajkot to Chennai and Kasaragod, Kerala. Where the taxable person has stated telephonically to the investigating officer that he had not made any outward suply outside Gujarat. There is a discrepancy between the e-way bill of the outward supply generated by the taxable person, the GST Returns submitted online and the statement given by the taxable person telephonically.
Hence, these transactions seem to be suspicious.
12. As per returns, BASIYA TRADING GSTN: 24AVGPB02621120 has made inward supply of Areca Nut of ₹ 12,41,21,643/- during the period Jan/20 to Jun/20 and made outward supply of ₹ 10,27,71,958/- hence remains stock of ₹ 2,13,49,685/-. No stock of any kind was found from the place of business as per the investigation report of the place of business.
13. BASIYA TRADING GSTN:24AVGPB02621120 shows more than 43% outward supply as B2C. Even after such large B2C outward supply in Crore. The place of business does not open regularly. In this situation arrangement of outward supply of B2C, the owner or their authorized representative and sufficient place to store the stock not be there which is not likely there actually on basis of investigation report of the place of business.
5. The matter, as on date, is at the stage of Form GST MOV-10. Thus, the writ applicant has been called upon to show-cause as to why the goods and the vehicle should not be confiscated under Section 130 of the Act.
6. The writ applicant is here before this Court with a prayer that the goods and the vehicle may ordered to be released pending the confiscation proceedings. As the confiscation proceedings are pending, we are not inclined to grant any relief as prayed for at this point of time. We expect the writ applicant to participate in the confiscation proceedings and make good his case that no case for confiscation is made out. If the writ applicant wants provisional release of the goods and the vehicle, it is always open for him to prefer an application before the concerned authority under Section 67(6) of the Act, 2017. we may only observe that if such application is filed, then the concerned authority shall look into the same at the earliest and pass an appropriate order in accordance with law.
7. With the above observations, this writ application stands disposed of. We clarify that we have otherwise not gone into the merits of the matter.