2019 (10) TMI 1448 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - Levy of penalty u/s 129(1)(b) of the Rajasthan State Goods and Services Tax Act, 2017 - respondents submitted that the writ petition is not an appropriate remedy, for which, the petitioner has approached this Court - HELD THAT - This Court has considered the provisions, which are contained in Rule 140 of the Central Goods and Services Tax Rules, 2017 where power has been given to release the seized goods on provisional basis upon execution of a bond for the value of the goods on furnishing of a security in the form of a bank guarantee equivalent to the amount of tax, interest and penalty payable. This Court finds that the petitioners have adequate remedy of challenging the order, which is passed by the Authority and as such, the Appellate Authority will decide as whether the adjudicating authority has passed the order in rightful manner or not. This Court is not making any comment on merits of the case and as such, it is solely on the Appellate Authority to decide the validity of the order passed by the respondents - This Court deems it proper to permit the petitioners to furnish the bank guarantee to the respondents and on furnishing such bank guarantee, the respondents may release the goods and vehicle in question. It is also made clear that bank guarantee, which will be furnished by the petitioners, will not be encashed by the respondents, till decision by the Appellate Authority. Petition disposed off.

Summary

Issues:
Challenge to penalty order under Section 129(1)(b) of the Rajasthan State Goods and Services Tax Act, 2017 and release of seized vehicle and goods.

Analysis:

The petitioner challenged a penalty order and sought the release of a seized vehicle and goods in a writ petition. The petitioner argued that the penalty order was illegal and the penalty imposed was unjust under Section 129(1)(b) of the Act of 2017. The respondents contended that the writ petition was not the appropriate remedy, suggesting that the petitioner should appeal to the Appellate Authority instead. The petitioner claimed losses due to the non-release of the vehicle and goods by the Authorities, despite having paid the tax.

In a related writ petition, the petitioners sought the immediate release of a vehicle with goods and requested to declare the actions of the Tax Authorities as bad. The respondents argued that the petitioners failed to disclose that an appeal had been filed before the Appellate Authority, emphasizing the need to exhaust this remedy. The petitioners expressed willingness to pursue the appeal process but requested the Court to release the goods and vehicle from the respondents in the meantime.

The Court considered Rule 140 of the Central Goods and Services Tax Rules, 2017, which allows for the release of seized goods on a provisional basis upon furnishing a bank guarantee equivalent to the tax, interest, and penalty payable. The respondents suggested imposing conditions for releasing the goods, including the provision of a bank guarantee by the petitioners. The Court clarified that the Appellate Authority would determine the validity of the order passed by the respondents and emphasized that it was not commenting on the merits of the case.

Ultimately, the Court permitted the petitioners to furnish a bank guarantee to the respondents for the release of the goods and vehicle. The Court directed that the bank guarantee should not be encashed by the respondents until the Appellate Authority made a decision. It was also held that no action under Section 130 of the Act of 2017 should be taken by the respondents until the appeal was disposed of. The writ petitions were disposed of with these directions.