2018 (10) TMI 1622 - HC - GST

Validity of seizure order - Section 67(2) of the U.P. Goods and Services Tax Act, 2017 - apart from directing for the deposit of the Central G.S.T., State G.S.T. and penalty under both the Acts, an equivalent amount of fine has also been imposed under both the Acts - Held that - The imposition of penalty and fine simultaneously amounts to double jeopardy and that the interest of the petitioner be protected by releasing deemed reasonable conditions which were deemed proper by the court. We direct the Standing Counsel as well as counsel for the Tax Department to seek instructions and file counter affidavit within a month. Two weeks thereafter are allowed to the petitioner for filing rejoinder affidavit.

Summary

Issues:
Challenge to order of seizure under Section 67(2) of the U.P. Goods and Services Tax Act, 2017; Imposition of penalty and fine under both Acts simultaneously; Release of seized goods upon deposit of specified amounts.

Analysis:
The petitioner challenged the order of seizure under Section 67(2) of the U.P. Goods and Services Tax Act, 2017, contending that it was not an order by the Adjudicating Officer, thus no appeal under Section 107 of the Act was maintainable, and the only recourse was through writ jurisdiction. The court, prima facie, acknowledged the lack of appeal remedy and entertained the writ petition. Subsequently, the court proceeded to consider the merits of the order dated 21.08.2018, which included directions for depositing Central G.S.T., State G.S.T., penalty, and imposition of an equivalent amount of fine under both Acts. The petitioner argued that simultaneous imposition of penalty and fine amounted to double jeopardy, seeking protection of their interests through reasonable conditions.

The court directed the Standing Counsel and counsel for the Tax Department to seek instructions and file a counter affidavit within a month, allowing the petitioner two weeks to file a rejoinder affidavit thereafter. The matter was listed for admission/final disposal after the specified period. In the interim, the court ordered the immediate release of the petitioner's seized goods upon the petitioner's deposit or furnishing of a bank guarantee for the specified amount of ?74,700 for Central GST, State G.S.T., and the equivalent fine under both Acts. The court's directive aimed to balance the interests of the petitioner while ensuring compliance with tax obligations.

This judgment highlights the court's approach to addressing challenges to orders of seizure under tax statutes, emphasizing the availability of writ jurisdiction in the absence of a specific appeal remedy. The court's consideration of the imposition of penalties and fines under both Acts simultaneously reflects a concern for preventing double jeopardy and protecting the interests of the petitioner. The order for release of seized goods upon specified conditions demonstrates a practical approach to balancing enforcement requirements with the rights of the taxpayer, promoting a fair resolution of tax disputes within the legal framework.