Heard learned advocate Mr. Devendra Harnesha with learned advocate Mr. Anurag Agrawal for the petitioner and learned Assistant Government Pleader Mr. Trupesh Kathiriya for the respondent.

1.1 Learned Assistant Governemnt Pleader Mr. Trupesh Kathiriya files affidavit-in-reply on behalf of respondent No.3, which is ordered to be taken on record.

2. By this petition, the petitioner has challenged the order order dated 7.7.2022 passed by the respondent No.3 State Tax Officer(2), Mobile Squad, Dahod, in FORM GST MOV-11 under the provisions of Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’).

2.1 The petitioner purchased Scraped Stainless Steel from M/s. Aman Enterprise vide Invoice No. 03 dated 28.06.2022. The petitioner sold the said goods to M/s. Jindal Stainless Steel, Jajpur (Odisha) and after making payment to M/s. Aman Enterprises raised Invoice No. 89 and 90 dated 28.6.2022 in favour of M/s. Jindal Stainless Steel and the said Scraped Stainless Steel was transported through M/s.Manish Logistics vide bill of Lading No. 332 dated 28.6.2022 in Lorry No. OR-04-N-1161 after issuing E-Way Bill No. 6114 3561 4562.

2.2 It is a case of the petitioner that during the course of transit, the Lorry No. OR-04-N-1161 carrying the aforesaid goods was intercepted by the respondent No.3 at 2.10 pm on 29.06.2022. The respondent No.3 recorded the statement of driver of Lorry in FORM GST MOV-01 and also carried out verification/inspection in FORM GST MOV-02. The Confiscated goods was valued at Rs. 36,16,500/-.

3. It appears that thereafter notice in FORM GST MOV-10 was issued under section 130 of the CGST Act on 1.7.2022. The petitioner submitted reply to the notice on 5.7.2022. Thereafter, the respondent No.3 passed the order of confiscation of the goods in question in FORM GST MOV-11 on 7.7.2022 and also imposed penalty of Rs. 6,50,970/- and also imposed fine in lieu of confiscation of conveyances amounting to Rs. 650970/-.

4. A contention has been raised by the petitioner that the goods in question were purchased from one M/s. Aman Enterprise and the same was being transported. When the goods were in transit, the authorities intercepted the goods and confiscated them. In another words, it was submitted that the authorities sought to derive their powers to overcome the possession of the petitioner of goods in transit from section 129 of the GST Act. It was submitted that since section 129 of the GST Act begins with the non-obstante clause, it is a provision independent of section 130. It was submitted that the entire exercise of powers under section 130 was without jurisdiction.

5. While the above question raised by the petitioner would require a detailed examination, it could be immediately noticed that the impugned order came to be passed in a quick succession as noticed above, that too without permitting the petitioner to file reply. The hot hurry on the part of the authorities sacrificed the right of the petitioner to reply and in the process, there was evident breach of principles of natural justice to the prejudice to the petitioner.

5.1 In the circumstances, a prima facie case is made out for grant of interim relief.

6. Rule, returnable on 23.11.2022. Mr. Trupesh Kathiriya, learned Assistant Government Pleader waives service of notice of Rule on behalf of the respondent No.1 State.

6.1 By way of interim relief, it would be just and proper to direct the respondents to release the goods and conveyance of the petitioner, however, upon imposition of suitable condition on the petitioner.

6.2 As could be seen from the impugned order, the penalty is calculated at Rs. 6,50,970/-. The same amount is calculated towards the fine in lieu of confiscation of conveyance. It will be expedient if the petitioner is asked to deposit Rs. 13 lakhs and furnish bank guarantee of Rs. 36,16,500/- of any nationalised bank till final disposal of this petition as a part of condition for grant of interim relief.

6.3 Resultantly, by way of interim relief the respondents are directed to release the goods and conveyance of the petitioner on condition that the petitioner deposits with the competent authority of the respondents an amount of Rs. 13 lakhs within 10 days. The petitioner shall further comply with the condition of furnishing bank guarantee of Rs. 36,16,500/- to be furnished within 10 days alongwith deposit of amount of Rs. 13 lakhs as above.

6.4 Non-compliance of any of the above conditions, shall render the order of grant of interim relief liable to be vacated.

7. Direct service for respondent No.2 is permitted. In addition to the acceptance of service of notice of Rule by Mr. Trupesh Kathiriya, learned Assistant Government Pleader on behalf of respondent No.1, direct service shall also be effected by the petitioner on both the respondents.