High Court requires bank guarantee for detained goods pending liabilities determination. The High Court declined immediate release of detained goods by State VAT authorities due to incomplete submission of facts by the petitioner. The Court ...
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High Court requires bank guarantee for detained goods pending liabilities determination.
The High Court declined immediate release of detained goods by State VAT authorities due to incomplete submission of facts by the petitioner. The Court required a bank guarantee of Rs. 1,55,00,000 to secure Revenue's interest until final liabilities are determined. The goods would be released upon provision of the bank guarantee from a scheduled bank. The petitioner's petition was disposed of with the condition of providing the bank guarantee, allowing for the release of goods from the warehouse.
Issues: 1. Detention of goods by State VAT authorities for alleged duty evasion. 2. Petitioner's request for release of perishable goods. 3. Concerns raised by the AGP regarding the release of goods. 4. Court's assessment of the petitioner's liabilities and conditions for release of goods.
Analysis: 1. The petitioner sought the High Court's intervention to lift the attachment on Castor Seeds detained by State VAT authorities at a warehouse, alleging duty evasion. The goods were stored without proper documentation, leading to their detention since 19.12.2015.
2. Emphasizing the perishable nature of the goods, the petitioner, through counsel, highlighted the risk of quality deterioration and the commitment to deliver the goods before Diwali. Requesting the release of goods under suitable conditions to fulfill the commitments made to buyers.
3. The AGP contended that the time available for authorities to respond was limited, and the goods were not highly perishable. Expressing concerns about the petitioner's actions, the AGP argued that releasing the goods without safeguarding the Revenue's interest was not advisable.
4. The Court, considering the limited time available and the petitioner's incomplete submission of facts, declined immediate release of goods. The Court reviewed a statement provided by the petitioner to the VAT authorities, estimating tax, interest, and penalty liabilities at Rs. 1,54,36,314. The petitioner was offered the goods' release upon payment of this amount, which was refused.
5. Acknowledging the pending assessment and the petitioner's liability estimation, the Court proposed the release of goods upon furnishing an unconditional bank guarantee of Rs. 1,55,00,000 to secure the Revenue's interest until final liabilities are determined. The Court directed the release of goods upon provision of the bank guarantee from a scheduled bank.
6. Consequently, the petition was disposed of with the condition that the petitioner provides a bank guarantee of Rs. 1.55 crores to be recovered by the department against the tax, interest, and penalty liabilities when finalized, leading to the release of goods from the warehouse.
7. The petition was disposed of accordingly, with direct service permitted for compliance with the Court's directions.
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