Gujarat High Court Upholds GST Confiscation Proceedings Under Section 130: Writ Petition Dismissed on Grounds of Doubtful Locus and Premature Challenge

Case Overview

Case: Nitin Hiralal Jain Vs State Tax Officer
Court: Gujarat High Court
Forum: Writ Petition under Article 226 of the Constitution of India
Subject: Challenge to Show-Cause Notice in Form GST MOV-10 proposing confiscation under Section 130 of the Gujarat Goods and Services Tax Act, 2017

The Gujarat High Court recently delivered a significant ruling dismissing a writ petition that sought to challenge a show-cause notice issued in Form GST MOV-10 dated 29.01.2026, which proposed confiscation of goods and conveyance under Section 130 of the Gujarat Goods and Services Tax Act, 2017. The Court's decision rested on two foundational pillars — the doubtful locus standi of the petitioner and the prematurity of judicial interference at the show-cause notice stage.

Background and Facts of the Case

The petitioner was a proprietary concern registered under the GST Act, assessed under the jurisdiction of Delhi GST authorities. In the ordinary course of business, the petitioner claimed to have received an order for the supply of S.S. Scrap to a buyer, M/s. Savitri Alloys, located in Dehgam, Gujarat.

Sequence of Events Leading to the Dispute

  1. An E-way Bill No. 771597979971 dated 18.01.2026 was generated in connection with the said supply, and the goods were dispatched through a transporter named Shreenath Roadlines.

  2. On 19.01.2026, the conveyance carrying the goods was intercepted at Kharel, Surat by the Mobile Squad of the respondent State Tax authorities.

  3. Upon interception, the driver produced the relevant E-way Bill. A physical verification was subsequently carried out, leading to the issuance of Form GST MOV-02 dated 19.01.2026, followed by Form GST MOV-04.

  4. On 21.01.2026, the goods were formally detained through the issuance of Form GST MOV-06, with the authorities citing upstream irregularities and raising suspicion that the underlying transaction was bogus and fictitious in nature.

  5. The petitioner submitted a detailed reply on 22.01.2026 to Form GST MOV-06, asserting that the movement of goods was supported by all valid statutory documents, that no physical discrepancy had been recorded during verification, and that there was therefore no legitimate basis for detention or confiscation proceedings.

  6. Notwithstanding this reply, the respondent authorities proceeded to issue a show-cause notice in Form GST MOV-10 on 29.01.2026, formally proposing confiscation under Section 130 of the Gujarat Goods and Services Tax Act, 2017. This notice became the subject matter of the present writ petition.

  7. The petitioner also filed a detailed reply dated 12.02.2026 to the show-cause notice before approaching the High Court.

Arguments Advanced by the Petitioner

Learned advocate Mr. Ravish Bhatt, appearing on behalf of the petitioner, advanced the following contentions before the Court:

Lack of Jurisdictional Foundation