Mandatory GST pre-deposit renders detaining authority functus officio, goods released on security u/s 129(c).

HC held that once a mandatory pre-deposit is made and the impugned order is thereby rendered inoperative pending appeal, the detaining authority becomes functus officio and further recovery is subject to appellate outcome. Consequently, detained goods and vehicle are to be released, subject to safeguards securing revenue interests. The Court directed the petitioner either to pre-deposit 200% of the maximum penalty, after adjusting amounts already paid, or, in the alternative, to furnish a bank guarantee in terms of Section 129(c) of the applicable GST enactments and Rules. The writ petition was disposed of on these terms.

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Issues:
The issues involved in the judgment are detention of goods due to alleged wrongful passing of Input Tax Credit, imposition of penalty equivalent to 100% value of detained goods, and the requirement of pre-deposit for release of goods pending appeal.

Detention of Goods:
The petitioner transported goods with accompanying E-Way Bill but faced detention based on an order alleging wrongful passing of Input Tax Credit by the supplier. Petitioner contended that the movement of goods complied with GST enactments and rules.

Imposition of Penalty:
The respondents imposed a penalty equal to 100% of the value of the detained goods, while the petitioner had paid 25% of the disputed penalty and initiated a statutory appeal under Section 107 of the CGST Act. The court noted that the maximum penalty could be 200% of the tax amount payable.

Pre-Deposit for Release of Goods:
The court referred to the need for a mandatory pre-deposit under Section 107(6) of the CGST Act before goods can be released. The petitioner was directed to pre-deposit 200% of the maximum penalty or provide a Bank Guarantee under Section 129(c) of the GST enactments. The court emphasized the balance between revenue interests and the petitioner's rights in releasing the goods upon compliance.

Conclusion:
The court disposed of the writ petition with directions for the petitioner to make the necessary pre-deposit or furnish a Bank Guarantee for the release of goods. The judgment aimed to safeguard revenue interests while ensuring a fair process for the petitioner, emphasizing compliance with GST enactments and rules.

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