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Court permits release of seized goods with bank guarantee under Rule 140 of CGST Rules The court ruled in favor of the revenue department, allowing the provisional release of the seized goods upon submission of a bank guarantee equivalent to ...
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Court permits release of seized goods with bank guarantee under Rule 140 of CGST Rules
The court ruled in favor of the revenue department, allowing the provisional release of the seized goods upon submission of a bank guarantee equivalent to the applicable tax, interest, and penalty as per Rule 140 of the Central Goods and Service Tax Rules, 2017. The petitioner, a transporter, was required to comply with this rule for the release of the confiscated vehicle. As the petitioner disclaimed ownership of the goods, the revenue department was permitted to auction them. The court disposed of the writ petition accordingly, without issuing any specific orders regarding the goods' owners.
Issues: Petitioner's vehicle and goods confiscated, appeal rejected, seeking release of vehicle and against auctioning. Interpretation of Rule 140 of Central Goods and Service Tax Rules, 2017 regarding provisional release of seized goods. Dispute over requirement of bank guarantee for confiscated goods and vehicle.
Analysis: The petitioner, a transporter, had his vehicle and goods confiscated, with his appeal being rejected. Despite the provision for a second appeal, the petitioner approached the court seeking the release of the vehicle and objecting to its auctioning. The revenue department, represented by counsel, cited a judgment of the Supreme Court and Rule 140 of the CGST Rules, stating that for interim custody of the confiscated vehicle, the said rule could be invoked. Additionally, reference was made to a previous court order concerning the acceptance of a security bond for the release of goods and vehicles.
The court noted the provisions of Rule 140, which allow for the provisional release of seized goods upon execution of a bond and submission of a bank guarantee equivalent to the applicable tax, interest, and penalty. The revenue authorities expressed willingness to release the vehicle if the petitioner complied with Rule 140 by submitting the required bank guarantee. However, the petitioner argued that as a transporter and not the owner of the goods, he should not be required to submit a bank guarantee for the confiscated goods, contending that it should only be necessary for the vehicle.
Considering the submissions, the court observed that the petitioner claimed ownership only of the vehicle as a transporter and disclaimed ownership of the goods. Consequently, the revenue department was deemed free to auction the goods. However, if the petitioner submitted a bank guarantee as per Rule 140 for the vehicle's valuation, the revenue department would release the vehicle upon satisfaction. As the owners of the goods were not present in court, no specific order regarding them was necessary, leading to the disposal of the writ petition accordingly.
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