Petitioner's detained goods released pending deposit of tax & penalty as bank guarantee. E-mode notice service.

The Court allowed the release of the petitioner's detained goods pending notice service and admission of the matter. The petitioner was directed to deposit the tax amount and a portion of the penalty as a bank guarantee within three days. The release of the truck was subject to proof of deposit and cooperation with the showcause notice hearing scheduled for 16.06.2020, with notice delivery permitted through e-mode.

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Issues:
Petition challenging showcause notice under Section 129 of the GST Act for minor mismatch in address on invoices and E-way bill.

Analysis:
The petitioner, a company with a single GST registration for its factory and warehouse, faced detention of goods due to an inadvertent address mismatch on the E-way bill during transportation. The showcause notice issued under Section 129(3) of the CGST Act/SGST Act was contested by the petitioner, arguing that such powers should be exercised for major discrepancies, not minor technical errors. The petitioner sought release of goods detained on the grounds of urgency for production during lockdown.

The Court heard arguments from both parties and directed the petitioner to deposit the entire tax amount and a penalty as a bank guarantee. The respondent highlighted the availability of alternative remedies and suggested a penalty amount of 100% of the tax, while the petitioner proposed a lower penalty of &8377; 1,000 or 10% of the tax amount. The Court considered the pandemic situation, the necessity of goods for production, and the petitioner's compliance readiness.

In consideration of the circumstances, the Court allowed the release of the detained goods pending notice service and admission of the matter. The petitioner was instructed to deposit the tax amount and a portion of the penalty as a bank guarantee within three days. The release of the truck was contingent upon proof of deposit and cooperation with the showcause notice hearing scheduled for 16.06.2020. Direct service through e-mode was permitted for notice delivery.

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