2018 (10) TMI 1189 - HC - GST

Invocation of Bank guarantee by respondents before prosecuting the appeal by petitioner - petitioner's case is that if the respondents invoke the bank guarantee, the petitioner's right to statutory remedy becomes illusory - Held that - Indeed, in terms of Section 107 of the Act, read with Rule 108 of the Goods and Services Tax Rules; to appeal, the petitioner has three months' time from the date of Ext.P7 impugned order. But it may be inequitable for the respondent authorities to invoke the bank guarantee before the limitation to appeal ends. Petition disposed off by holding that the respondent will not invoke the bank guarantee for three months - petition disposed off.

Summary

Issues:
1. Detention of goods under Section 129 of the Goods and Services Tax Act due to supplier's failure to collect IGST.
2. Threat of invoking bank guarantee by the 4th respondent hindering the petitioner's right to file a statutory appeal.
3. Interpretation and applicability of Rule 140(2) of the CGST Rules 2017 in relation to detention of goods under Section 129 of the CGST Act.
4. Availability of alternative statutory remedy for the petitioner to approach the appellate authority.
5. Time limitation for filing an appeal under Section 107 of the Act and Rule 108 of the Goods and Services Tax Rules.

Analysis:
1. The petitioner, a timber dealer, faced proceedings under the GST Act as the timber purchased in Tamil Nadu and brought to Kerala was detained under Section 129 due to the supplier's failure to collect IGST. The petitioner managed to release the goods by furnishing a bank guarantee.

2. The petitioner sought to file a statutory appeal against adverse orders but was threatened by the 4th respondent regarding the bank guarantee. This threat posed a hindrance to the petitioner's right to pursue the appeal, leading to the filing of a writ petition.

3. The petitioner also requested a declaration that Rule 140(2) of the CGST Rules 2017 should not apply to the detention of goods under Section 129 of the CGST Act. The petitioner's counsel referenced a previous judgment but acknowledged the need to distinguish and present its case before the appellate forum.

4. The Government Pleader argued that the petitioner had an alternative statutory remedy available by approaching the appellate authority, emphasizing the availability of such recourse.

5. The judgment disposed of the writ petition by directing that the respondent authorities should not invoke the bank guarantee for three months, allowing the petitioner time to pursue remedies before the appellate authority within the specified time limit for appeal under Section 107 of the Act and Rule 108 of the GST Rules. The petitioner was advised to seek interim protection during the appeal process.