2019 (7) TMI 1066 - HC - GST

Court orders submission of bank guarantee for tax and penalty amounts under CGST Act, emphasizing statutory procedures

The court disposed of the writ petition challenging the detention order and show-cause notice under the CGST Act, 2017 without delving into the merits of ... Maintainability of petition - Detention order - compliance with the mandate of Section 129 of the Act - HELD THAT:- The issues raised are at preliminary stage and this Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage. To confirm to the scheme under the Act, the writ petition is disposed of by directing that the petitioner submits bank guarantee for the tax and penalty as shown in Ext.P8 and applies for release of goods by enclosing a copy of this order within two days from today. The respondent shall release the goods detained under Ext.P7 and subjected to enquiry in Ext.P8 within twelve hours from the date and time of receipt of bank guarantee. Petition disposed off. Issues:1. Challenge to detention order and show-cause notice under CGST Act, 2017.2. Maintainability of the writ petition.3. Compliance with requirements of law for transit of goods.4. Provision of bank guarantee for release of detained goods.5. Adjudication of merits at the preliminary stage.Analysis:1. The petitioner contested the legality of Exts. P7 and P8 notices issued by the respondent under Sections 129(1) and 129(3) of the CGST Act, 2017, claiming full compliance with the Act's requirements. The petitioner argued that the detention of goods was unwarranted and illegal as they were prepared to demonstrate the generation and production of Part B/E-Way Bill for inspection within the stipulated time.2. The Government Pleader raised objections to the maintainability of the writ petition, citing an alleged omission or illegality in the transportation of goods. It was argued that the transporter failed to produce all necessary documents during the inspection, indicating a lack of valid transit. The plea emphasized that Section 129 not only allows for detention but also provides for the release of goods upon compliance with the Act's provisions, suggesting the option of furnishing a bank guarantee for the demanded tax and penalty amounts.3. In response, the petitioner's counsel acknowledged the willingness to provide a bank guarantee, expressing confidence in the lawful transit of goods. However, concerns were raised about the indefinite nature of the bank guarantee requirement, highlighting the financial burden and commission costs associated with such guarantees.4. The judge, after considering the arguments presented, disposed of the writ petition without delving into the merits of the case at the preliminary stage. The petitioner was directed to submit a bank guarantee for the tax and penalty amounts specified in Ext.P8 and apply for the release of detained goods within two days. The respondent was ordered to release the goods within twelve hours of receiving the bank guarantee, keeping it valid for six weeks. Additionally, the respondent was instructed to complete the enquiry, provide a fair opportunity to the petitioner, and communicate the decision within four weeks.5. The court refrained from adjudicating on the merits of the case, emphasizing adherence to the statutory scheme under the Act. The judgment focused on procedural aspects, such as the provision of a bank guarantee, release of detained goods, and the timeline for completing the enquiry and issuing a decision. The petitioner was relieved of the obligation to maintain the bank guarantee beyond six weeks if the respondent failed to comply with the court's directives.