2018 (3) TMI 1318 - HC - GST

Traders Win: GST E-Way Bill Seizure Halted, Goods Released on Non-Cash Security with Future Challenge Rights

HC ruled on GST E-Way Bill dispute, ordering immediate release of seized goods upon providing non-cash security. Court directed respondents to file ... Interim release of seized goods on security - E-Way Bill compliance - revival of pre-amendment Rule 138 - rescission of notifications affecting Rule 138 - challenge to proceedings subject to writ adjudication - indemnity bond as a form of securityInterim release of seized goods on security - indemnity bond as a form of security - E-Way Bill compliance - Interim release of the petitioner's seized goods and vehicle on specified security. - HELD THAT: - The Court directed immediate release of the goods and the vehicle seized for alleged non-possession of an E-Way Bill, subject to the petitioner furnishing security other than cash and bank guarantee for the proposed tax and penalty and executing an indemnity bond equal to the value of the seized goods. The order is interlocutory and provisional, preserving the departmental right to pursue assessment or penal proceedings. The petitioner was permitted to file a reply to the show cause notice within the time stipulated if a final order has not been passed.Seized goods and vehicle released forthwith on furnishing specified security and indemnity bond; petitioner permitted to reply to show cause notice by the date directed.Revival of pre-amendment Rule 138 - rescission of notifications affecting Rule 138 - E-Way Bill compliance - Question whether the original Rule 138 (pre-4th amendment) stands revived upon rescission of the notifications enforcing the amended Rule 138 is not finally decided and requires further adjudication. - HELD THAT: - The Court has not adjudicated the merits of the contention regarding revival of the original Rule 138 following rescission of the notifications dated 30/31.01.2018. It directed the respondents to file a counter-affidavit within one month and granted the petitioner two weeks thereafter to file a rejoinder affidavit. The matter is listed for admission/final disposal after the affidavits are placed on record, indicating that the substantive legal question will be decided on the basis of those pleadings and submissions.Substantive question kept open for adjudication; parties directed to file affidavits and matter posted for final disposal.Challenge to proceedings subject to writ adjudication - Effect of subsequent orders passed pursuant to the departmental show cause notice in light of the writ petition. - HELD THAT: - The Court clarified that any order passed pursuant to the show cause notice shall remain subject to the ultimate decision in the writ petition, and simultaneously afforded the petitioner liberty to challenge such orders in the appropriate forum. This preserves the petitioner's appellate or remedial rights while maintaining the interim nature of relief granted by the Court.Orders passed pursuant to the show cause notice will be subject to the writ petition's outcome; petitioner permitted to challenge them in the appropriate forum.Final Conclusion: Interim relief granted permitting immediate release of seized goods and vehicle on furnishing specified security and indemnity bond; the core legal question regarding revival of the pre-amendment Rule 138 upon rescission of notifications is left undetermined and listed for final disposal after filing of counter and rejoinder affidavits. Issues:1. Seizure of goods for lack of E-Way Bill.2. Interpretation of Rule 138 of the Uttar Pradesh Goods and Services Tax Rules, 2017.3. Release of seized goods and vehicle pending proceedings.Analysis:1. The petitioner's goods were seized on 16.03.2018 due to the absence of an E-Way Bill. The primary issue before the court is to determine the legality of this seizure and subsequent actions based on the provisions of Rule 138 of the Uttar Pradesh Goods and Services Tax Rules, 2017.2. The crux of the matter revolves around the interpretation of Rule 138 of the said Rules, specifically in light of the amendments made to it. The court is tasked with deciding whether the original version of Rule 138, predating the 4th amendment, would come back into effect following the withdrawal of notifications enforcing the amended Rule 138 from 30/31.01.2018 onwards.3. In response to the submissions from both parties, the court has directed the Special Counsel for the respondents to file a counter affidavit within a month. Following this, the petitioner is granted two weeks to file a rejoinder affidavit. The court has scheduled the case for admission/final disposal after this period. Meanwhile, the court has ordered the immediate release of the petitioner's seized goods and vehicle upon providing security in a form other than cash or bank guarantee, including an indemnity bond covering the value of the seized goods.4. Additionally, the court has stipulated that any future orders resulting from show cause notices will be subject to the decision of this writ petition. The petitioner is also granted the liberty to challenge such orders in the appropriate forum. The petitioner is allowed to respond to the show cause notice by 24.03.2018, provided a final order has not been issued by then.In conclusion, the judgment addresses the issues of goods seizure, Rule 138 interpretation, and the release of seized goods pending further proceedings, ensuring a fair and balanced approach to the legal matters at hand.