2019 (5) TMI 1334 - HC - GST

Detention Order - Section 129 (3) of CGST Act - Part B/E-Way Bill was also generated and produced for inspection - HELD THAT - The issues raised are at preliminary stage and this Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage. To confirm to the scheme under the Act, the writ petition is disposed of by directing that petitioner submits bank guarantee for the tax and penalty as shown in Ext.P12 and applies for release of goods by enclosing a copy of this order within two days from today. The 1st respondent shall release the goods detained under Ext.P11 and subjected to enquiry in Ext.P12 within twelve hours from the date and time of receipt of bank guarantee. The bank guarantee shall be kept valid for six weeks from today. The 1st respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner and pass and communicate this order within four weeks from today. The 1st respondent, if fails to pass the order as directed by this Court the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks.

Summary

Issues:
Challenging legality of detention order and notice under CGST Act, 2017.

Analysis:
The petitioner challenged the legality of Exts.P11 and P12 notices issued by the 1st respondent under the CGST Act, 2017, claiming compliance with all Act requirements. The petitioner argued that the detention of goods was unwarranted and illegal as they were able to demonstrate compliance within the given time. The Government Pleader contended that there was an omission in transporting goods as all required documents were not produced during inspection. The detention order was deemed non-final, with provisions for release upon compliance with Section 129 of the Act, including furnishing a bank guarantee for tax and penalty amounts demanded through Ext.P12.

In response, the petitioner expressed confidence in the lawful transit of goods, agreeing to provide a bank guarantee but raised concerns about the authority not issuing final orders, leading to continuous bank guarantee maintenance. The petitioner highlighted the substantial commission charged by the bank for the guarantee, posing a financial burden. The Court, after considering the arguments, disposed of the writ petition without delving into the merits, emphasizing adherence to the Act's scheme.

The Court directed the petitioner to submit a bank guarantee for tax and penalty as per Ext.P12 within two days for the release of detained goods. The 1st respondent was ordered to release the goods within twelve hours of receiving the bank guarantee, keeping it valid for six weeks. Additionally, the respondent was instructed to complete the enquiry, provide a fair opportunity to the petitioner as per the Act, and communicate the order within four weeks. Failure to comply would relieve the petitioner from maintaining the bank guarantee beyond the specified period.