2019 (6) TMI 116 - HC - GST

Court directs release of goods, requires bank guarantee for tax & penalty under CGST Act.

HAMZA TRADERS Versus STATE OF KERALA, REPRESENTED BY THE SECRETARY, STATE GOODS AND SERVICE TAX DEPARTMENT, THIRUVANANTHAPURAM, ASSISTANT STATE TAX OFFICER, PALAKKAD AND AIYSHA TRADERS

The court disposed of the writ petition challenging a notice under Section 129(3) of the CGST Act, 2017 for illegal interception and detention of goods. ... Release of seized goods - violation of Rule 138 of CGST Rules, 2017 - valid E-way bill or not - HELD THAT:- The petitioner submits bank guarantee for the tax and penalty as shown in Ext. P3 and applies for release of goods by enclosing a copy of this order within two days from today. The second respondent shall release the goods detained under Ext. P3 and subjected to enquiry in Ext. P3 within twelve hours from the date and time of receipt of bank guarantee. The bank guarantee shall be kept valid for six weeks from today. The second respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner and pass and communicate this order within four weeks from today. The handwritten endorsement made on Ext. P4 is set aside and the second respondent considers the objection strictly in accordance with law, affords opportunity, passes order and communicates to the petitioner. Issues: Challenge to notice under Section 129(3) of CGST Act, 2017 for illegal interception and detention of goods.Analysis:1. The petitioner challenged the Ext. P3 notice issued under Section 129(3) of the Central Goods & Service Tax Act, 2017, claiming it was illegal and beyond the jurisdiction of the second respondent. The petitioner's goods were intercepted on 14. 5. 2019, and the second respondent found omissions as recorded in Ext. P3 notice. The petitioner responded with Ext. P4 reply, but the second respondent rejected the request for release of goods, leading to the writ petition.2. The petitioner's counsel argued that the goods were transported with valid documents, and the petitioner could provide the E-Bill as well. The counsel requested setting aside the Ext. P4 order based on the special circumstances of the case.3. The respondent's representative contended that internal evidence indicated the interception was beyond the place covered by the invoice, and the E-Bill was generated after the interception. The transporter failed to produce all required documents during the inspection, leading to the detention. The respondent suggested that the petitioner could furnish a bank guarantee for the tax and penalty amount to facilitate the release of goods.4. In response, the respondent reiterated that the detention was unwarranted as the goods were transported in compliance with the law. The respondent mentioned the option of providing a bank guarantee but highlighted the continuous obligation of keeping it alive until final orders were passed.5. The court, after considering the submissions and records, disposed of the writ petition without delving into the merits at the preliminary stage to conform to the Act's scheme.6. The court directed the petitioner to submit a bank guarantee for tax and penalty as per Ext. P3 and apply for the release of goods within two days. The second respondent was instructed to release the detained goods within twelve hours of receiving the bank guarantee, keeping it valid for six weeks. The respondent was given four weeks to complete the enquiry, pass a fair order, and communicate it to the petitioner, with a warning against failing to comply.7. The court set aside the handwritten endorsement on Ext. P4, instructing the second respondent to consider the objection in accordance with the law, provide an opportunity, pass an order, and communicate it to the petitioner.