2023 (3) TMI 998 - HC - GST

Tobacco Seizure Upheld: Procedural Noncompliance Prevents Release of Goods Under Section 67 of UPGST Act

The SC examined a GST case involving seized tobacco goods. The court classified tobacco as perishable and ruled that the petitioner failed to meet ... Perishable goods - release of seized goods - seizure under section 67 of the GST Act - notification under sub section (8) of section 67 - applicability of section 67(8) as distinct from section 67(6) - deposit under section 74(5) not substituting statutory requirement for perishable goodsPerishable goods - notification under sub section (8) of section 67 - seizure under section 67 of the GST Act - Seized goods consisting of tobacco fall within the class of perishable goods and their release is governed by sub section (8) of section 67 of the GST Act as covered by the notifications dated 13 June 2018 (Central) and 12 June 2018 (State). - HELD THAT: - The Court accepted the departmental notification issued under sub section (8) of section 67 which treats taxable goods falling within Chapters 1 to 24 of the Customs Tariff as perishable; tobacco is included within that classification. The seizure in question pertains to goods that are within the definition of tobacco, and hence the goods are to be treated as perishable for the purposes of release. Whether the authorities actually sold the goods under Rule 141(2) within the stipulated period is not determinative of the characterisation; non sale does not convert goods prescribed as perishable by the notifications into non perishable goods.Goods seized (tobacco) are perishable and release is to be dealt with under the procedure applicable to perishable goods under section 67(8) and the relevant notifications.Deposit under section 74(5) not substituting statutory requirement for perishable goods - release of seized goods - A deposit made under section 74(5) of the GST Act does not satisfy the statutory requirement for release of goods treated as perishable under section 67(8); non compliance with the specific requirements for perishable goods disentitles the petitioner to release. - HELD THAT: - The Court noted the petitioner's contention that a deposit under section 74(5) had been made but accepted the State's submission that such deposit is insufficient for release where the goods are governed by section 67(8). The petitioner had not complied with the statutory procedure for release of perishable goods; accordingly no direction for release was issued. The Court, however, permitted the petitioner to comply with the statutory requirements applicable to perishable goods and directed that if the petitioner deposits the requisite amount and fulfils the conditions prescribed by law, the department shall deal with the claim expeditiously and in accordance with law.Deposit under section 74(5) does not entitle release of perishable goods under section 67(8); petitioner may seek release only upon complying with the statutory requirements for perishable goods, after which the department shall act promptly.Final Conclusion: The petition was dismissed insofar as it sought direction for release of the seized tobacco goods because they are perishable and governed by section 67(8) and the notifications; the petitioner remains at liberty to comply with the statutory requirements for release of perishable goods, upon which the department must consider the claim expeditiously. Issues involved: Petition to quash seizure order under section 67 of UPGST Act and command to release seized goods.Judgment Summary:Issue 1: Classification of seized goods as perishable or non-perishableThe petitioner, a registered GST dealer, sought release of goods seized by the department under section 67 of UPGST Act. The department argued that the goods, identified as tobacco, fall under the category of perishable goods as per notifications issued by the Central Board of Indirect Taxes and Customs. The court agreed that tobacco is considered perishable as per the notifications and ruled that the goods seized are indeed perishable, rejecting the petitioner's contention that they should be treated as non-perishable due to not being sold within a specific timeframe.Issue 2: Compliance with release requirementsThe petitioner claimed to have deposited an amount under section 74 (5) of the GST Act and requested the release of the seized goods. However, the department contended that the deposit made was insufficient for the release of perishable goods under section 67 (8) of the Act. The court found that the petitioner did not meet the requirements for the release of perishable goods and therefore was not entitled to a direction for release. The petitioner expressed willingness to deposit the necessary amount as per the law for the release of perishable goods, and the court stated that if the petitioner complies with the requirements, the claim will be processed promptly and lawfully.Final DecisionThe court concluded that the petitioner, not having fulfilled the conditions for the release of seized perishable goods, was not entitled to a court order for their release. The petition was closed, with the petitioner given the opportunity to comply with the necessary legal requirements for the release of the goods classified as perishable.This summary provides a detailed breakdown of the judgment, addressing each issue involved in the case and highlighting the key legal aspects and decisions made by the court.