2018 (8) TMI 1145 - HC - GST

Detention of goods - first contention is that there is no cause for directing a Bank Guarantee to be furnished - Held that - The Section specifically speaks of a Bank Guarantee and we find that the appellant had agreed to furnish a Bank Guarantee before the learned Single Judge - no interference required. Furnishing of Bank Guarantee only for the tax and penalty - Held that - It is directed to release the goods on the appellant furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules. Appeal disposed off.

Summary

Issues:
1. Requirement of Bank Guarantee under Section 129 of the KGST Act and Rule 140 of the CGST Rules.
2. Furnishing of Bank Guarantee for tax and penalty versus bond for the value of goods.

Analysis:

1. The judgment pertains to an appeal against the decision in WP(C) No.25661 of 2018, where the appellant's goods were detained under Section 129 of the Kerala Goods and Services Tax Act, 2017, and Rule 140 of the Central Goods and Services Tax Rules, 2017. The first issue raised was the necessity of directing a Bank Guarantee to be furnished. The Court noted that the Section explicitly mentions a Bank Guarantee, and the appellant had agreed to furnish one. Consequently, the Court found no grounds to interfere with this requirement.

2. The second contention addressed was whether the Bank Guarantee should cover only the tax and penalty or if a bond for the value of goods could suffice. Rule 140(1) of the CGST Rules was cited, stating that seized goods may be released provisionally upon a bond for the value of goods in FORM GST INS-04 and a bank guarantee for the applicable tax, interest, and penalty. The Court interpreted this to mean that both a Bank Guarantee for tax and penalty and a bond for the value of goods are necessary. Thus, the judgment modified the Single Judge's decision to direct the release of goods upon furnishing a Bank Guarantee for tax and penalty and a bond for the value of goods as per Rule 140(1) of the CGST Rules.

3. In conclusion, the Court modified the original judgment and ordered the release of goods upon the appellant providing the required Bank Guarantee for tax and penalty, along with a bond for the value of goods as specified under Rule 140(1) of the CGST Rules. The appeal was disposed of with this directive.