2022 (9) TMI 1491 - HC - GST

Detention of goods along with the vehicle which was transporting footwear - validity of e-way bill had expired - HELD THAT - No useful purpose will be served in keeping the writ petition pending since the entire tax has been recovered when the goods were imported from Nepal and crossed the customs barrier into India. If at all the respondent authorities for alleged violation of the provisions of CGST Act are to initiate action the question of imposition of penalty could arise. The writ petition and the appeal can be disposed of by issuing certain directions, which can not only safeguard the interest of the appellant but also that of the revenue.

Summary

Issues:
Detention of goods due to expired e-way bill validity, absence of interim relief, recovery of tax upon import from Nepal, initiation of penalty action under CGST Act, imposition of penalty, release of goods upon furnishing a bond, submission of reply to show cause notice, adjudication process, validity of bond during proceedings.

Detention of Goods:
The appellant challenged the detention of goods and a vehicle transporting footwear imported from Nepal, citing the expired validity of the e-way bill as the reason for interception. The High Court noted that the tax had already been recovered upon import into India, rendering the detention unnecessary. The Court highlighted that any alleged violation of the CGST Act could lead to penalty imposition, but the detention in this case was deemed unjustified.

Absence of Interim Relief:
The learned Single Judge did not grant interim relief in the case, prompting the appellant to file an intra-Court appeal. The absence of interim relief led to the matter being brought before the High Court for further consideration and resolution.

Initiation of Penalty Action under CGST Act:
The judgment emphasized that if authorities were to take action for purported violations of the CGST Act, the question of imposing penalties would arise. The Court indicated that penalty proceedings could be initiated based on the alleged non-compliance with the Act's provisions.

Imposition of Penalty and Release of Goods:
To address the situation, the Court directed the appellant to furnish a bond to the satisfaction of the authorities to secure the proposed penalty mentioned in the show cause notice. Upon bond submission, the goods and the vehicle were ordered to be released within 24 hours. The appellant was granted 15 days to respond to the show cause notice, after which the authority would conduct an adjudication process, including a personal hearing, to determine penalties based on merits and in compliance with the law.

Validity of Bond during Proceedings:
The judgment specified that the bond provided by the appellant would remain valid until the conclusion of the penalty adjudication proceedings. This provision ensured that the bond would serve as security throughout the legal process until a final decision was reached.

Conclusion:
The High Court disposed of the writ petition and the appeal by issuing directions that safeguarded both the appellant's interests and those of the revenue authorities. The judgment aimed to resolve the matter efficiently by releasing the goods upon bond submission, allowing for a response to the show cause notice, and ensuring a fair adjudication process while maintaining the validity of the bond. No costs were awarded in this case.