Gujarat High Court Declines to Interfere in GST Confiscation Where Assessee Hid Key Facts

Background and Context

In Vijay Laxmi Trading Vs State of Gujarat (Gujarat High Court), the assessee invoked the writ jurisdiction of the Gujarat High Court challenging multiple actions taken by the GST authorities. The petition sought to nullify:

• A show cause notice in Form GST DRC-01 dated 08.10.2025
• A detention order in Form GST MOV-06 dated 08.10.2025
• A confiscation order in Form GST MOV-11 dated 08.10.2025
• A consequential demand order issued in Form GST DRC-07

The dispute stemmed from interception of a vehicle on 22.07.2025, alleged transport of goods without an e-way bill, detention and confiscation proceedings under Section 130 of the Central Goods and Services Tax Act, 2017, and subsequent release of goods and conveyance upon payment of tax and penalty.

Although the Court initially advised the assessee to pursue the statutory appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017, counsel for the assessee insisted on a decision on merits under Article 226.

Petitioner’s Core Contentions

Challenge to Detention and Confiscation

Counsel for the assessee attacked the impugned GST actions on several grounds:

1. Absence of physical verification order
   It was argued that no formal order authorising physical verification of the conveyance had been issued when the vehicle was intercepted on 22.07.2025. On this basis, the assessee contended that the detention and subsequent proceedings lacked legal foundation.

2. No computation of penalty at interception stage
   According to the assessee, when the vehicle was stopped, the officer did not communicate or provide any calculation of the penalty that was allegedly leviable. This was projected as a serious procedural irregularity vitiating the proceedings.

3. Difficulty in identifying confiscation order on portal
   The assessee submitted that all orders had been collectively uploaded on the GST portal, and because the documents were clubbed, he was genuinely unable to trace or identify the Form GST MOV-11 order. On this basis, he claimed that he could not annex or challenge that specific order in the writ petition.

4. Inconsistency in date of release order in Form MOV-05
   It was pointed out that the competent authority had passed an order in Form MOV-05 dated 08.10.2025, whereas the goods and conveyance were actually released on 26.07.2025. While the assessee did not dispute that the release occurred on 26.07.2025, he tried to build a case that the later dated order did not refer to confiscation and thus undermined the confiscation proceedings.

5. Invoices and payment of tax/penalty already made
   The assessee claimed that at the time of interception, valid GST invoices were produced to the authorities and both tax and penalty were duly paid. Given this, it was asserted that there was no justification to initiate or continue confiscation proceedings under Section 130 of the Act.

6. Reliance on earlier Gujarat High Court precedent
   To support the proposition that confiscation is unwarranted once tax and penalty are paid, the assessee relied upon the decision in M/s. Panchhi Traders through its authorised signatory Narendra Danabhai Daki vs. State of Gujarat Through Deputy Commissioner (Enforcement) & Another, decided in SCA No.9250 of 2020 on 11.12.2025. Based on this judgment, the assessee contended that the authorities had overstepped the law by resorting to confiscation.

On the strength of these submissions, the petitioner requested the High Court to quash all impugned orders and consequential demands.

Stand of the State Authorities

Objection on Maintainability

On behalf of the State, the learned Assistant Government Pleader argued that the writ petition was not maintainable because: