High Court Upholds Seizure Order, Emphasizes Appellate Tribunal as Proper Forum for Tax Challenges

The High Court dismissed the Writ Petition challenging the order of seizure under Section 129 (3) of the Uttarakhand G.S.T. Act. The Appellate Authority's dismissal of the appeal under Section 107 was upheld, emphasizing that the Appellate Tribunal is the appropriate forum for such challenges. The Court highlighted the importance of fair implementation of tax laws and the need to balance tax collection with citizens' rights. The petitioner was granted liberty to approach the Appellate Tribunal under Section 112, subject to the Tribunal's constitution as per statutory provisions.

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Issues:
Challenge to order of seizure under Section 129 (3) of Uttarakhand G.S.T. Act. Dismissal of appeal under Section 107 by Appellate Authority. Availability of statutory remedy under Section 112 before Appellate Tribunal.

Analysis:
The petitioner challenged an order of seizure under Section 129 (3) of the Uttarakhand G.S.T. Act, which allows the competent authority to seize goods or conveyances after issuing a notice under the Central Goods and Services Tax Act, 2017. An appeal under Section 107 of the Act was filed by the petitioner, but it was dismissed by the Appellate Authority on 27th January, 2021. The petitioner then sought a remedy under Section 112 of the Act before the Appellate Tribunal. The Coordinate Bench of Kerala High Court, in a similar case, held that the only available remedy against an appellate order on seizure under Section 129 (3) is to approach the Appellate Tribunal.

The Kerala High Court emphasized that detention of goods and vehicles cannot be justified unless there is a possibility of tax evasion. The authority with detention powers under a tax statute must strictly construe the provisions authorizing detention, considering the citizen's constitutional rights. Fair implementation of tax laws is crucial for the rule of law in a republic. The introduction of GST in India marked a significant change in indirect tax collection, requiring both the Centre and States to act in harmony based on GST Council recommendations.

The High Court ruled that the writ jurisdiction under Article 226 of the Constitution of India is not maintainable against an appellate order on seizure under Section 129 (3). Consequently, the Writ Petition was dismissed, but the petitioner was granted liberty to approach the Appellate Tribunal under Section 112 of the Act. The judgment's applicability is subject to the condition that the State has constituted the Appellate Tribunal as per the provisions of Section 110 of the Central Goods and Services Tax Act, 2017. If the Tribunal has not been constituted, the petitioner can file an application before the Court.

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