2019 (7) TMI 841 - HC - GST

Detention order - Section 129 (1) of CGST Act, 2017 - Jurisdiction - HELD THAT - 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 this order. The petitioner submits bank guarantee for the tax and penalty as shown in Ext.P5 and applies for release of goods by enclosing a copy of this order within two days from today. The respondent shall release the goods detained under Ext.P4 and subjected to enquiry in Ext.P5 within twelve hours from the date and time of receipt of bank guarantee.

Summary

Issues:
Challenge to detention order and show-cause notice under CGST Act, 2017.

Analysis:
The petitioner contested the legality and jurisdiction of the detention order (Ext.P4) and show-cause notice (Ext.P5) issued under Section 129 of the CGST Act, 2017. The petitioner argued that they were fully compliant with the Act's requirements and could demonstrate the generation and production of Part B/E-Way Bill for inspection within the stipulated time. Hence, the petitioner deemed the proceedings initiated through Exts.P4 and P5 as unwarranted and illegal.

The Government Pleader raised objections to the maintainability of the writ petition. It was contended that there was an omission or illegality in the transportation of goods as the transporter failed to produce all necessary documents during the inspection, indicating a violation of valid transit requirements. The Government Pleader highlighted that Section 129 not only allows for detention but also provides for the release of goods upon compliance with the Act's provisions. Suggesting that the petitioner could secure the release of goods by furnishing a bank guarantee for the tax and penalty amount demanded through Ext.P5.

In response, the petitioner's counsel acknowledged the willingness to provide a bank guarantee, emphasizing the adherence to legal transit requirements. However, concerns were raised about the indefinite nature of the bank guarantee, as final orders from the authority were pending. The petitioner's counsel also highlighted the financial burden of providing the bank guarantee at a substantial commission without any benefit.

Upon considering the arguments presented, the Court disposed of the writ petition without delving into the merits of the case, citing the preliminary nature of the raised issues. The Court directed the petitioner to submit a bank guarantee for the tax and penalty specified in Ext.P5 within two days for the release of the detained goods. The 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 release the petitioner from the obligation to maintain the bank guarantee beyond six weeks.