2022 (2) TMI 844 - HC - GST

Goods Movement Without E-Way Bill: Court Orders Release Upon Tax Payment and Bank Guarantee Under GST Rules

J.R. Metal Chennai Limited Versus The Deputy State Tax Officer, Chennai

The HC addressed a challenge to Form GST MOV-2 communication regarding movement of goods without an E-Way bill. Petitioner argued that transport from port ... Confiscation of goods - reasons for issuing Form GST MOV-2 is in Sl.No.5 of the impugned communication is that the previous movement of goods was not covered an E-Way bill - HELD THAT:- It is noticed that at the time of seizure, the goods accompanied E-Way bill. However, the allegation that no E-Way bill was generated for the previous transport from the port of import to the CFS. It is not clear as to whether for movement of goods from CFS to the petitioner's premises accompanied an E-Way bill and whether it was generated or not. This matter would require a detailed consideration. At the same time, no useful purpose will be served by detaining the goods other than the inflict of financial loss on the petitioner. Even if the petitioner is eventually found guilty of the violation of the provisions of the Act and the Rules made thereunder, Penalty and Fine are only to be imposed - the petitioner is directed to pay the disputed tax and furnish a bank guarantee for the tax and 25% of the tax amount towards penalty within a period of seven days from the date of receipt of a copy of this order to the satisfaction of the respondent. Goods directed to be released on payment of disputed GST and 25% of tax as bank guarantee. The writ petitions stand disposed of Issues:Challenge to Impugned Communication in Form GST MOV-2; Interpretation of Rule 138(14)(c) of the E-Way Rules; Prematurity of Writ Petitions; Requirement of E-Way bill for movement of goods from port to container freight station; Direction to pay disputed tax and furnish a bank guarantee.Analysis:The petitioner challenged the Impugned Communication dated 27.01.2022 in Form GST MOV-2, which stated that the previous movement of goods did not have an E-Way bill. The petitioner contended that movement from the port to the container freight station for assessment did not require an E-Way bill as per Rule 138(14)(c) of the E-Way Rules. The petitioner argued that being exempted from generating E-Way bills for this movement, the communication was unjust and should be deemed illegal.The respondent, represented by the Additional Government Pleader, argued that the writ petitions were premature as the issue needed adjudication, and any confiscation orders should follow the issuance of Form GST MOV-2. The court considered both parties' arguments and noted that while the goods had an E-Way bill at the time of seizure, it was unclear if one was generated for the previous transport from the port to the container freight station.Acknowledging the need for detailed consideration, the court directed the petitioner to pay the disputed tax and provide a bank guarantee for the tax amount plus 25% towards penalty within seven days. Upon compliance, the respondent was instructed to release the goods and proceed with further orders based on merits. The petitioner was granted the opportunity to make submissions and appear before the respondent in this regard.The court emphasized that detaining the goods served no purpose other than causing financial loss to the petitioner. Even if the petitioner was found guilty of violating the Act and Rules, penalties and fines would suffice. The Bank Guarantee provided by the petitioner could be encashed and appropriated by the respondent pending final orders. Ultimately, the writ petitions were disposed of with the specified directions, without any costs, and related miscellaneous petitions were closed.