GST detention of identifiable goods may end with alternative security instead of bank guarantee or cash

Detained goods under GST may be released on furnishing reasonable security other than bank guarantee or cash where the goods are admittedly identifiable and the statutory appeal has already been filed with the prescribed pre-deposit, leaving recovery of the balance stayed. The court treated continued departmental custody as unnecessary in such circumstances and directed release on alternative security to protect the revenue. The release was also clarified not to be a provisional release.

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Issues: Whether goods detained under the GST enactments could be ordered to be released on furnishing security other than bank guarantee or cash pending disposal of the statutory appeal.

Analysis: Penalty had been levied under the State GST enactments and the petitioners had already filed appeals by depositing the prescribed pre-deposit, with recovery of the balance amount deemed stayed. The provisions relating to detention and release of goods, together with the mechanism of security and bank guarantee, were considered in the context of the need for uniform application of GST law and the fact that the goods remained in departmental custody. As there was no dispute regarding identity of the goods, the Court directed release on furnishing security other than bank guarantee or cash and clarified that such release would not be treated as provisional.

Conclusion: The issue was decided in favour of the petitioners, and the goods were ordered to be released on furnishing security other than bank guarantee or cash.

Ratio Decidendi: Where detained goods are admittedly identifiable and the statutory appeal is already pending with the requisite pre-deposit made, the Court may direct release on reasonable security other than bank guarantee or cash to secure the revenue while avoiding unnecessary continued detention.

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