2019 (3) TMI 67 - HC - GST

Seizure of goods alongwith vehicle - irregularities in the documents accompanying the goods - Held that - In the present case, it is the owner who has come forward for release of the goods and the vehicle and therefore in the light of the interim direction of this court, security or indemnity bond equal to the amount of the purposed tax and penalty alone could have been demanded by the Assistant Commissioner (Commercial Tax), instead he has unnecessarily asked for security/indemnity bond of heavy amount of ₹ 10,75,770/- - The aforesaid demand can not be sustained in law in the facts and circumstances of the case and the provisions of Section 129 (1) of the Act. The impugned order dated 6.10.2018 is quashed and the direction is issued to the Assistant Commissioner (Commercial Tax) to accept the security and indemnity bond as directed vide order dated 4.10.2018 of the value of tax and penalty ie. ₹ 59,120/- each from the petitioner and to release the goods and the vehicle forthwith accordingly - petition allowed.

Summary

Issues: Seizure of goods and vehicle, challenge to seizure, demand for security and indemnity bond, violation of court's interim order, excessive demand of security, quashing of order, observation regarding authorities' actions.

The judgment by the Allahabad High Court dealt with a case where goods were seized due to irregularities in accompanying documents during transportation from Delhi to Ghaziabad. The petitioner challenged the seizure through a writ petition, which led to an interim order directing the release of goods upon providing security or an indemnity bond equal to the value of tax and penalty. However, the Assistant Commissioner demanded a significantly higher security amount of &8377; 10,75,770, which was contested by the petitioner as a violation of the court's interim order. The court found the demand excessive and not in line with the interim direction, quashing the order and instructing the Assistant Commissioner to accept security and indemnity bond of &8377; 59,120 each as directed in the interim order. The judgment criticized the authorities for their highhandedness and cautioned them to adhere to court directions without deviation, emphasizing the need for careful handling of such matters.

In analyzing the issues involved, the court first addressed the challenge to the seizure of goods and the vehicle based on irregularities in accompanying documents. The petitioner filed a writ petition contesting the seizure, leading to an interim order for release upon providing security or an indemnity bond equal to the tax and penalty value. The court emphasized the importance of following court orders and ensuring that the authorities do not overstep their bounds in demanding excessive security amounts beyond what was directed in the interim order.

The next issue involved the demand for security and indemnity bond by the Assistant Commissioner, which was significantly higher than what was directed in the court's interim order. The petitioner argued that the demand was in violation of the court's direction, which only required security and indemnity bond equal to the tax and penalty value. The court agreed with the petitioner, quashing the excessive demand and instructing the Assistant Commissioner to adhere to the interim order's directives regarding the security amount.

Furthermore, the judgment highlighted the excessive demand for security and indemnity bond as an act of harassment by the authorities, criticizing their highhandedness in the matter. The court cautioned the department to handle such cases carefully and strictly follow court directions without deviation, emphasizing the need for authorities to act in accordance with the law and court orders to avoid unnecessary disputes and inconvenience to the parties involved.