High Court Upholds Order Requiring Bank Guarantee for Goods Release

The appeal was dismissed by the High Court, upholding the order of the Single Judge. The appellant's request to release goods on furnishing an indemnity bond instead of a bank guarantee was denied. The Court emphasized that penalty can only be imposed after a hearing and that the Act mandates a bank guarantee for release of goods under Section 129. The appellant's appeal was dismissed without costs, as no patent illegality was found in the order under appeal.

---

---

Issues:
1. Validity of the order passed by the learned Single Judge in Writ Petition (M/S) No.3178 of 2019 dated 15.10.2019.
2. Detention of goods and conveyances in transit under Section 129 of the Central Goods and Services Tax Act, 2017.
3. Rights of the appellant-writ petitioner in response to the show-cause notice under Section 129(3) of the 2017 Act.
4. Request for release of goods on furnishing an indemnity bond instead of a bank guarantee.

Analysis:
Issue 1: The appellant filed a writ petition seeking to quash the order in MOV-6 and 7 dated 11.10.2019 and for a mandamus to release the vehicle and goods detained at the Kulhal border in Vikasnagar, Dehradun. The Single Judge noted the circumstances of the detention, the show-cause notice issued under Section 129(3) of the 2017 Act, and the premature nature of the writ petition. The Single Judge directed the appellant to reply to the show-cause notice and observed that penalty can only be imposed after a hearing. The appeal was filed against this order.

Issue 2: Section 129 of the 2017 Act deals with detention, seizure, and release of goods in transit. The appellant argued that the goods were not liable to tax as they were being transported from Himachal Pradesh to Uttarakhand. The provisions of Section 129(1) were discussed, stating that goods can be released on payment of applicable tax and penalty. The appellant contended that they should be allowed to furnish an indemnity bond instead of security.

Issue 3: The appellant was entitled to file a reply to the show-cause notice under Section 129(4) of the 2017 Act. The Court directed the authorities to consider the appellant's replies and pass a reasoned order within a specified time frame. The appellant requested additional time to submit a reply, which was granted, excluding holidays.

Issue 4: The appellant sought release of goods on furnishing an indemnity bond instead of a bank guarantee. The Court noted that the Act required a bank guarantee for release and declined to grant the request. The Court dismissed the appeal, stating that interference in an intra-court appeal is justified only in case of a patent illegality, which was not found in the order under appeal. The appellant's request was denied, and the appeal was dismissed without costs.

---