2019 (8) TMI 941 - HC - GST

High Court orders bank guarantee submission for tax and penalty, mandates timely release of goods

SUBRAMONIAN VELAYUDHAN ACHARY PROPRIETOR, SUBRAMANIA INDUSTRIES Versus THE ASSISTANT STATE TAX OFFICER SQUAD NO. 1, KERALA STATE GOODS AND SERVICE TAXES, THIRUVNANATHAPURAM, THE STATE TAX OFFICER, SQUAD NO. 1, KERALA STATE GOODS AND SERVICE TAXES, THIRUVANANTHAPURAM, THE COMMISSIONER OF STATE GSTD, THIRUVANANTHAPURAM AND THE CENTRAL BOARD OF EXCISE AND CUSTOMS, DEPARTMENT OF REVENUE, NEW DELHI

The High Court directed the petitioner to submit a bank guarantee for the tax and penalty amount specified in Ext.P4(c) within two days for the release of ... Validity of detention order - release of goods - Section 129 of CGST Act, 2017 - maintainability of petition - 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 conform to the scheme under the Act, the writ petition is disposed of by this order. The petitioner submits bank guarantee for the tax and penalty as shown in Ext.P4(c) and applies for release of goods by enclosing a copy of this order within two days from today. The 2nd respondent shall release the goods detained under Ext.P4(b) and subjected to enquiry in Ext.P4(c) 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 2nd 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. Petition disposed off. Issues Involved:Challenge to Ext.P4 series notices as illegal and without jurisdiction; Maintainability of the writ petition; Detention of goods under Section 129 of CGST Act, 2017; Requirement of bank guarantee for release of goods.Analysis:1. Challenge to Ext.P4 series notices: The petitioner contested the legality and jurisdiction of Ext.P4 series notices issued by the 1st respondent under Section 129 of the CGST Act, 2017. The petitioner argued that all requirements of the Act were complied with, and the petitioner was ready to demonstrate the generation and production of Part B/E-Way Bill for inspection. Hence, the petitioner deemed the notices as unwarranted and illegal.2. Maintainability of the writ petition: The Government Pleader raised objections to the maintainability of the writ petition, pointing out an alleged omission or illegality in the transportation of goods. It was highlighted that at the time of inspection, the transporter failed to produce all necessary documents to establish valid transit of goods. The Government Pleader emphasized that Section 129 not only allows for detention but also provides for the release of goods upon compliance with the Act's requirements. The petitioner was advised to furnish a bank guarantee for the tax and penalty amount demanded in Ext.P4(c) to facilitate the release of detained goods.3. Detention of goods under Section 129 of the Act: The petitioner, confident of the lawful transit of goods, expressed willingness to provide a bank guarantee for the tax and penalty. However, concerns were raised regarding the indefinite nature of the bank guarantee, as final orders were not being issued promptly by the authority, leading to continuous financial burden on the petitioner due to substantial commission charges by the banker.4. Court's Decision: The High Court, after considering the arguments presented, disposed of the writ petition. The Court directed the petitioner to submit a bank guarantee for the tax and penalty amount specified in Ext.P4(c) within two days for the release of detained goods. The 2nd respondent was ordered to release the goods within twelve hours of receiving the bank guarantee, keeping it valid for six weeks. Additionally, the 2nd respondent was instructed to complete the enquiry process, provide a fair opportunity to the petitioner, and issue a final order within four weeks; failure to do so would relieve the petitioner from the obligation of maintaining the bank guarantee beyond six weeks.5. Conclusion: The High Court refrained from delving into the merits of the case at the preliminary stage, emphasizing adherence to the statutory scheme under the Act. The judgment primarily focused on facilitating the release of detained goods through the provision of a bank guarantee and ensuring a timely and fair resolution of the matter by the concerned authority.