Court upholds detention of goods under CGST Act, directs deposit and bank guarantee

The court declined to quash the notice challenging the detention of goods under Section 130 of the CGST Act and GGST Act. The applicant was directed to deposit a specified amount towards tax and penalty and provide a bank guarantee for the goods' value to secure their release. Compliance with these conditions would lead to the release of the goods and vehicle, allowing the adjudication process to continue.

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Issues:
Challenge to detention of goods under Section 129(2) of the CGST Act and a notice issued under Form MOV-10 under Section 130 of the CGST Act and GGST Act.

Analysis:
The writ applicant, engaged in trading tobacco, challenged the detention of goods and a notice issued under Section 130 of the CGST Act and GGST Act. The applicant purchased tobacco units, which were to be delivered by road but were seized due to a discrepancy in the e-way bill. The authorities initiated proceedings under Section 129, imposing a penalty and tax of Rs. 9,94,000. Simultaneously, a notice under Section 130 was issued to show cause for possible confiscation, alleging tax evasion. The applicant sought relief, arguing against confiscation, citing a previous court decision. The government pleader opposed, claiming tax evasion intent. The court decided not to quash the notice, allowing the authority to adjudicate it but directed the applicant to deposit Rs. 10,00,000 towards tax and penalty and provide a bank guarantee of Rs. 7,00,000 for the goods' value to secure their release due to the risk of damage during monsoon. The goods and vehicle would be released upon compliance, while the adjudication would proceed. The writ application was disposed of accordingly.

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