2018 (7) TMI 1823 - HC - GST

Release of seized Jewellery - petitioner is unable to furnish bank guarantee in terms of sub-rule (1) of Rule 140 of the Rules - Held that - It was pointed out that the seized articles belong to third parties, entrusted to the petitioner for Hall Marking and the owners of the articles are prepared to furnish bank guarantee so as to enable the petitioner to claim release of the seized articles - there is no stipulation anywhere that the security shall be furnished by the party claiming release of the seized articles. The writ petition is disposed of directing the third respondent to release the seized articles in accordance with sub-section (6) of Section 67 of the Act and sub-rule (1) of Rule 140 of the Rules

Summary

Issues:
Release of seized jewelry pending confiscation proceedings under the Kerala State Goods and Services Tax Act.

Analysis:
The petitioner had 25,024.180 gms of gold jewelry seized under Section 67 of the Kerala State Goods and Services Tax Act. The petitioner sought directions for the release of the seized jewelry pending confiscation proceedings. The power to release seized articles on a provisional basis is provided under sub-section (6) of Section 67 of the Act, subject to certain conditions. Rule 140 of the Kerala State Goods and Service Tax Rules outlines the procedure for releasing seized articles on a provisional basis, including the execution of a bond and furnishing of a security equivalent to the amount of applicable tax, interest, and penalty payable.

The petitioner claimed entitlement to the release of the seized articles based on the provisions of the Act and the Rules. However, the petitioner expressed inability to furnish the required bank guarantee as per Rule 140. It was highlighted that the seized articles actually belonged to third parties, entrusted to the petitioner for Hall Marking, and these third-party owners were willing to furnish the bank guarantee to facilitate the release of the jewelry. The court noted that there was no specific requirement for the security to be provided by the party seeking release of the seized articles.

Consequently, the court disposed of the writ petition by directing the third respondent to release the seized articles to the petitioner in accordance with the provisions of Section 67 of the Act and Rule 140 of the Rules. If the petitioner could not furnish the bank guarantee as per the Rule, the bank guarantees provided by the third parties for this purpose would be accepted. Importantly, the court clarified that its decision to facilitate the release of the jewelry did not involve an adjudication of the petitioner's contentions, leaving the substantive issues for further consideration in the ongoing proceedings.