Case Summary
Case Title: M/s Shreeji Steel v. State Tax Officer (1), Kutch Mobile Squad
Court: High Court of Gujarat, Ahmedabad
Petition No.: R/Special Civil Application No. 3929 of 2025
Date of Judgment: 02 April 2025
Category of Dispute: Confiscation of goods under Section 130 – Procedural legality of invoking confiscation provisions despite valid tax invoice and e-way bill
Relevant Sections: Section 130 of CGST Act, Rule 138 of CGST Rules
Facts (Paras 1–2)
The petitioner, M/s Shreeji Steel, transported goods purchased from M/s A.S. Construction, supported with a tax invoice issued by M/s N.K. Trading and accompanied by valid e-way bills under Rule 138 of the CGST Rules. Despite these documents, the mobile squad detained the goods and issued a confiscation notice under Section 130 (FORM GST MOV-10). The petitioner filed an additional affidavit producing supporting documents to substantiate the genuineness of the purchase and transit.
Questions in Dispute (Paras 3–4)
The central dispute was whether the authorities could invoke Section 130 (confiscation of goods) despite the existence of proper tax invoice and e-way bills, and whether irregularities, if any, with the supplier could justify penal action against the purchaser.
The petitioner argued that while they were willing to secure the goods by depositing ₹5 lakh and furnishing a bond of ₹13.74 lakh, the confiscation action itself was legally unsustainable.
Observations (Para 4)
The Court noted that the petitioner had complied with Rule 138 (e-way bill provisions). If there were concerns regarding the supplier’s compliance, appropriate action could be taken under the CGST Act, but invoking Section 130 for confiscation was premature and excessive. The Court accepted the petitioner’s readiness to secure the goods by partial deposit and bond.
Judgment (Paras 5–6)
The Court issued notice returnable on 24.04.2025, to be heard with SCA No. 8353 of 2022.
As ad-interim relief, the Court directed release of the goods and conveyance upon deposit of ₹5,00,000 and execution of a bond for ₹13,74,812, making it clear that this arrangement was without prejudice to the rights and contentions of the petitioner.
Cases Referred (Summary Table)
| Case | Citation / Petition | Verdict |
|---|---|---|
| M/s Shreeji Steel v. State Tax Officer (1), Kutch Mobile Squad | SCA 3929/2025 (Guj HC) | Confiscation notice under Section 130 not sustainable where goods had valid invoice & e-way bill; interim relief of release against deposit and bond granted |
Between Fine Lines
For businesses, this ruling emphasizes that valid tax invoice and e-way bill shield against arbitrary confiscation under Section 130. Any lapses attributable to the supplier cannot automatically penalize the buyer. At the same time, courts may balance interests by requiring partial deposit and security bond to safeguard revenue.
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