High Court Refuses to Quash GST Confiscation Notice at SCN Stage
The matter began when a consignment of stainless steel scrap, backed by a valid e-way bill, was intercepted by GST authorities while in transit from Maharashtra to Gujarat. During inspection, the officers initiated proceedings under the GST MOV framework and eventually detained the goods, raising concerns about the genuineness of the transaction and possible upstream irregularities.
Although the petitioner submitted a detailed reply stating that all documents were in order and no discrepancies were found during physical verification, the authorities proceeded to issue a confiscation notice under Section 130. Aggrieved, the petitioner approached the High Court, arguing that there was no material to suggest any intent to evade tax and that the proceedings were being carried forward mechanically. The State, on the other hand, pointed to inconsistencies in the transaction and questioned the petitioner’s standing to file the writ.
Issue Before Court: Whether a writ against a GST confiscation notice is maintainable at the show-cause stage.
HC Ruling: The High Court declined to entertain the writ petition, holding that it was premature and not maintainable at the stage of a show-cause notice. It noted that the petitioner’s connection with the transaction itself appeared unclear, especially since the movement of goods did not directly involve the petitioner in a manner evident from the record. This raised serious doubts about the petitioner’s locus to challenge the proceedings.
The Court further emphasized that a show-cause notice is only the starting point of adjudication, and interference at such an early stage is generally unwarranted. Since the matter involved disputed questions of fact, including allegations of possible tax evasion, the appropriate course was to allow the adjudicating authority to examine the issue in detail. The petition was dismissed, leaving the petitioner to pursue remedies within the statutory framework.
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