Case Note & Summary
The petitioner, a proprietary concern registered under the Gujarat Goods and Services Tax Act, 2017, but assessed under Delhi GST authorities, received an order for supply of S.S. Scrap to M/s. Savitri Alloys, Dehgam, Gujarat. An e-way bill was generated on 18.01.2026, and the goods were transported through Shreenath Roadlines. The conveyance was intercepted on 19.01.2026 at Kharel, Surat, by the Mobile Squad of the respondent, State Tax Officer (2) Mobile Squad, Enf 7, Surat. A show-cause notice in Form GST MOV-10 dated 29.01.2026 was issued proposing confiscation of goods and conveyance under Section 130 of the Act. The petitioner challenged the notice by way of a petition under Article 226 of the Constitution of India. The main legal issues were whether the show-cause notice was sustainable when the goods were intercepted at a location different from the destination mentioned in the e-way bill, and whether the respondent had jurisdiction to issue such notice. The petitioner argued that the e-way bill was valid and the interception at a different location did not indicate any intent to evade tax. The respondents contended that the goods were intercepted at a place not on the route to the destination, indicating a possible diversion. The court analyzed the provisions of Section 130 and held that confiscation requires an element of mens rea or intent to evade tax, which was absent in this case. The court also noted that the show-cause notice was issued by an officer who lacked territorial jurisdiction, as the petitioner was registered in Delhi and the goods were destined for Dehgam, not Surat. The court quashed the show-cause notice and directed the respondents to release the goods and conveyance forthwith.
Headnote
A) Goods and Services Tax - Confiscation under Section 130 - Mens Rea Requirement - Confiscation of goods and conveyance under Section 130 of the Gujarat Goods and Services Tax Act, 2017 requires an element of mens rea or intent to evade tax - Mere deviation from route or interception at a different location does not automatically justify confiscation - Held that the show-cause notice was issued without proper application of mind and without establishing any intent to evade tax (Paras 6-8). B) Goods and Services Tax - Show-Cause Notice - Jurisdiction - Proper Officer - A show-cause notice under Section 130 must be issued by a proper officer having territorial jurisdiction over the place of the registered person or the place of supply - In this case, the petitioner was registered in Delhi and the goods were destined for Dehgam, Gujarat, but the notice was issued by an officer in Surat without any nexus - Held that the notice was without jurisdiction and liable to be quashed (Paras 6-8). C) Goods and Services Tax - E-way Bill - Validity - Route Deviation - The validity of an e-way bill is not restricted to the route mentioned therein - The e-way bill remains valid for the movement of goods from the place of origin to the destination, even if the vehicle takes a different route - Held that the interception at Kharel, Surat, which is not on the direct route from Delhi to Dehgam, does not invalidate the e-way bill or justify confiscation (Paras 5-8).
Issue of Consideration
Whether the show-cause notice proposing confiscation of goods and conveyance under Section 130 of the Gujarat Goods and Services Tax Act, 2017, is sustainable when the goods were intercepted at a location different from the destination mentioned in the e-way bill, and whether the respondent had jurisdiction to issue such notice.
Final Decision
The show-cause notice in Form GST MOV-10 dated 29.01.2026 is quashed and set aside. The respondents are directed to release the goods and conveyance forthwith.
Law Points
- Confiscation under Section 130 of GGST Act requires mens rea
- Show-cause notice must be issued by proper officer having territorial jurisdiction
- E-way bill validity is not limited to route mentioned
- Interception at wrong destination does not ipso facto lead to confiscation
