Statutory release of detained goods permitted with hearing before penalty and no encashment of guarantee until adjudication.

Goods intercepted for a delivery challan showing CGST and SGST instead of IGST were directed to be dealt with under the statutory detention and release framework, rather than through direct condonation in writ jurisdiction. The Court indicated that the taxpayer could place the mistake before the adjudicating authority for consideration in accordance with law. It also required that an opportunity of hearing be given before any penalty is imposed, and that the bank guarantee furnished for release should not be encashed until adjudication is completed. Conditional release of the goods and carriage was therefore permitted on compliance with the prescribed guarantee and charges.

---

---

Issues: Whether the High Court should directly condone the tax-related error in the delivery challan and order release of the goods, and whether the petitioner was entitled to release of the goods on furnishing security with a hearing before imposition of penalty.

Analysis: The dispute arose from interception of goods during transport on the ground that the delivery challan showed CGST and SGST instead of IGST. The Court held that writ jurisdiction was not the proper forum to decide whether the error could be condoned. It nevertheless noted that the petitioner could comply with the statutory requirements relating to detention and release of goods and place the mistake before the adjudicating authority, which should then consider the matter in accordance with law. The Court also accepted the request that the petitioner should be given an opportunity of hearing before any penalty is imposed, and that the bank guarantee furnished for release should not be encashed until such adjudication is completed.

Conclusion: The petitioner was granted conditional relief for release of the goods and carriage on furnishing the prescribed bank guarantee and charges, with a direction that the adjudicating authority afford an opportunity of hearing before imposing penalty.

---