Detained Goods Under CGST Act: Court Rules Only 25% Penalty Deposit Required for Section 107 Appeal, Not Full Amount The HC disposed of a writ petition concerning goods detained in transit under CGST Act. The petitioner had secured vehicle release by providing surety ...
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Detained Goods Under CGST Act: Court Rules Only 25% Penalty Deposit Required for Section 107 Appeal, Not Full Amount
The HC disposed of a writ petition concerning goods detained in transit under CGST Act. The petitioner had secured vehicle release by providing surety bond and bank guarantee for 100% of penalty. The court ruled that petitioner need only deposit 25% of penalty to avail remedy under Section 107, not the full amount. Upon filing appeal with required deposit, the first respondent must return the bank guarantee/surety bond within ten working days after receiving proof of appeal filing and deposit. All contentions of parties were left open for subsequent proceedings.
Issues: 1. Quashing of the order for physical verification/inspection of goods and documents 2. Release of goods vehicle in transit 3. Remedy under Section 107 of the CGST Act 4. Deposit of penalty for availing remedy 5. Return of surety bond and bank guarantee
Analysis: 1. The petitioner sought relief for quashing the order for physical verification/inspection of goods and documents along with directions to release the goods vehicle in transit. The court noted that an order was issued under section 129[3] of the CGST Act, and the conveyance was released against a surety bond and bank guarantee provided by the petitioner. The petitioner was informed to avail remedy under Section 107 of the CGST Act by depositing 25% of the penalty as per the proviso to Section 107.
2. The court emphasized that if the petitioner has obtained the release of the vehicle by furnishing a surety bond and bank guarantee for 100% of the penalty, the petitioner should only be required to deposit 25% of the penalty to avail the remedy under Section 107. Therefore, the writ petition was disposed of, granting the petitioner liberty to avail the remedy under Section 107 upon depositing 25% of the penalty.
3. Regarding the return of the surety bond and bank guarantee, the court ordered that upon filing an appeal with the required deposit, if the petitioner provides details of the appeal and deposit to the first respondent, the first respondent must return the bank guarantee/surety bond within ten working days. The court clarified that all contentions of the parties were left open for further proceedings.
In conclusion, the judgment focused on the petitioner's right to avail remedy under Section 107 of the CGST Act by depositing 25% of the penalty, the return of the surety bond and bank guarantee upon compliance with the deposit requirement, and the disposal of the writ petition with liberty granted to the petitioner for further legal actions.
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