2018 (5) TMI 1703 - HC - GST

Seized Goods Released: GST Search Case Resolved with Conditional Deposit and Security Measures Under Section 67(2)

M/s J.V.D. Cera Coating And Colours (P) Ltd. Versus State Of U.P. And 4 Others

HC analyzed a GST search case involving non-production of books of account under Section 67(2) of U.P. GST Act. The court directed authorities to release ... Release of seized goods - books of account not produced - order passed under Section 67(6) of the GST Act, 2017 - principles of Natural Justice - as submitted that the books of account were produced along with the reply submitted by the petitioner on 25.02.2018 and without taking into account, on surmises and conjuncture, the impugned order dated 04.05.2018 was passed - Held that:- Prima facie, issue requires scrutiny - the respondent-authorities are directed to release the goods which were seized on 25.04.2018 subject to deposit of ₹ 3 lakh being made by the petitioner and for the balance amount adequate security may be provided other than cash or bank guarantee. Issues:1. Search conducted under Section 67(2) of the U.P. Goods and Services Tax Act, 2017.2. Non-production of books of account during the search.3. Impugned order passed under Section 67(6) of the GST Act, 2017.4. Consideration of produced books of account by the authority.5. Release of seized goods subject to deposit and security.Issue 1: Search conducted under Section 67(2) of the U.P. Goods and Services Tax Act, 2017.The judgment outlines that a search was carried out on the business premises of the petitioner on 25.04.2018 under the authority granted by Section 67(2) of the U.P. Goods and Services Tax Act, 2017. During this search, a panchnama of the goods was prepared on an estimated basis due to the non-production of relevant books of account.Issue 2: Non-production of books of account during the search.The petitioner's counsel argued that the books of account were not presented during the search as the accountant responsible for them was unavailable. The books were later produced along with a reply on 25.02.2018. It was contended that the impugned order, issued on 04.05.2018 under Section 67(6) of the GST Act, 2017, was based on assumptions and conjectures without considering the produced books of account.Issue 3: Impugned order passed under Section 67(6) of the GST Act, 2017.The petitioner raised concerns about the validity of the order issued under Section 67(6) of the GST Act, 2017, emphasizing that the authority should have verified the produced books of account with the actual stock before passing the order. The court acknowledged the need for a detailed examination of this issue.Issue 4: Consideration of produced books of account by the authority.The court directed the respondent-authorities to release the seized goods from the search conducted on 25.04.2018 upon the petitioner's deposit of Rs. 3 lakh. It was further stipulated that adequate security, other than cash or bank guarantee, should be provided for the remaining amount. The authorities were instructed to allow the petitioner to resume business operations upon compliance with these directives.Issue 5: Release of seized goods subject to deposit and security.In light of the facts presented, the court's decision focused on facilitating the release of the seized goods by imposing specific conditions related to the deposit and security arrangements. This approach aimed to balance the interests of both parties involved in the legal dispute.This detailed analysis of the judgment from the Allahabad High Court provides a comprehensive overview of the issues raised, arguments presented, and the court's directives concerning the search, non-production of books of account, impugned order, consideration of produced documents, and the release of seized goods.