2018 (8) TMI 67 - HC - GST

Detained Goods Released: Bank Guarantee Accepted as Interim Solution for Tax Documentation Dispute

The HC ruled on a goods detention case involving tax documentation. The court directed the respondent to release detained goods upon the petitioner ... Release of detained goods on furnishing bank guarantee - Rule 140 of the CGST Rules - efficacious alternative remedy under Section 107 of the Central Goods and Service Tax Act - physical inspection and detention of goods pending departmental proceedings - continuation of departmental proceedings notwithstanding provisional releaseRelease of detained goods on furnishing bank guarantee - Rule 140 of the CGST Rules - physical inspection and detention of goods pending departmental proceedings - Direction for provisional release of the petitioner's detained goods upon furnishing a bank guarantee and continuation of departmental proceedings. - HELD THAT: - The petitioner, whose vehicle carrying machinery was intercepted and goods detained after physical inspection and issuance of departmental proceedings (Ext.P7), agreed to furnish a bank guarantee as required by Rule 140 of the CGST Rules. The Court noted that, although an efficacious alternative remedy under Section 107 of the Central Goods and Service Tax Act exists, the petitioner elected to provide the bank guarantee for the value estimated in Ext.P7. The respondent authority accepted that upon receipt of the bank guarantee the goods could be released, while reserving the right to continue and conclude the departmental proceedings under Ext.P7 in accordance with law. On these mutual concessions and submissions, the Court directed release conditioned on the bank guarantee and permitted the Department to proceed with its adjudicatory action. [Paras 3, 4, 5]Goods to be released on petitioner furnishing the bank guarantee for the value mentioned in Ext.P7; departmental proceedings may continue and be concluded in accordance with law.Final Conclusion: Writ petition disposed by directing provisional release of the detained goods upon the petitioner furnishing the bank guarantee as estimated in Ext.P7; the departmental proceedings recorded in Ext.P7 may proceed and be concluded in accordance with law. Issues:1. Detention of goods due to lack of original or duplicate invoice during transportation.2. Questioning the respondent's action through a writ petition.3. Availability of an alternative remedy under Section 107 of the Central Goods and Service Tax Act.4. Agreement to provide a Bank guarantee as per Rule 140 of the CGST Rules for releasing the goods.The judgment dealt with the detention of goods by the respondent authority after intercepting a vehicle at Valayar Check Post due to the absence of the original or duplicate invoice, despite the driver presenting an e-way bill. The petitioner, a partnership firm, challenged this action by filing a writ petition. The court noted the availability of an alternative remedy under Section 107 of the Central Goods and Service Tax Act but considered the petitioner's agreement to provide a Bank guarantee as required by Rule 140 of the CGST Rules to secure the release of the goods detained under Ext.P7 proceedings.The court heard arguments from the petitioner's counsel and the Government Pleader representing the respondent. The Government Pleader indicated that if the petitioner furnished a Bank guarantee for the estimated value of the goods mentioned in Ext.P7, the respondent would have no objection to releasing the goods. It was also mentioned that the Department could continue proceedings under Ext.P7 to resolve the matter.In the judgment, the court directed the respondent to release the petitioner's goods upon the provision of a Bank guarantee for the value specified in Ext.P7. The court further instructed that following the release of goods, the authorities could proceed with further actions in compliance with the law, indicating a resolution path for the ongoing dispute.