2020 (2) TMI 277 - HC - GST

Release of detained goods alongwith the vehicle - violation of procedures for inspection and seizure as clearly enumerated in section 67, 68 129 of the Act - principles of natural justice - HELD THAT - It is ordered that the vehicle and goods detained in pursuance of the impugned Ext.P4 order shall be immediately released by the 1st respondent to the petitioner on his furnishing bank guarantee for the amounts shown in Ext.P4 - Thereafter, the 1st respondent will duly take up the matter for finalisation of adjudication proceedings pursuant to Ext.P4 and shall afford adequate opportunity of being heard to the petitioner through their representative/counsel, if any and then will pass orders finalising such adjudication proceedings, without much delay, preferably within a period of 6 weeks from the date of production of the certified copy of this judgment. Petition disposed off.

Summary

Issues:
1. Seizure of goods and vehicle by tax authorities due to clerical error in address on tax invoice and E Way bill.
2. Allegations of wrongful confinement, illegal detention, and demand for extra charges by tax authorities.
3. Petitioner's contentions against the notice issued by the tax authorities.
4. Relief sought through the writ petition.

Analysis:

Issue 1: Seizure of goods and vehicle due to clerical error
The petitioner, a partnership firm engaged in the business of Timber and Timber products, faced seizure of goods and vehicle by tax authorities due to a clerical error in the address on the tax invoice and E Way bill. The petitioner had generated a tax invoice for the supply of goods from Karnataka to Kerala, but due to a processing delay in updating the new branch address, the goods were addressed to the wrong location. The petitioner clarified that this error was unintentional and not an attempt to evade tax. The tax authorities seized the vehicle and issued a notice under relevant GST Acts for extra tax and penalty. The petitioner contended that the seizure was illegal and requested the release of the goods and vehicle.

Issue 2: Allegations of wrongful confinement and illegal detention
The petitioner argued that the tax authorities' actions were opposed to law and facts of the case. They claimed there was no tax evasion or suppression of facts leading to the seizure. The petitioner highlighted that they had paid the applicable CGST and SGST, declared the goods online, and had started a new branch, leading to the address discrepancy. The petitioner accused the tax authorities of exerting pressure to extract money through penalties and charges. They emphasized that the seizure and detention were illegal, causing financial losses due to additional charges like demurrage and container fees.

Issue 3: Petitioner's contentions against the notice
The petitioner challenged the notice issued by the tax authorities, alleging irregularities and violation of procedures outlined in the GST Acts. They argued that the tax authorities did not follow the principles of natural justice and lacked the authority to impose significant penalties and charges. The petitioner maintained that all relevant documents were submitted, and the error in the address was a clerical mistake, not warranting such severe actions.

Issue 4: Relief sought through the writ petition
In the writ petition, the petitioner sought various reliefs, including the release of the goods and vehicle, quashing of the notice, reconsideration of documents, and any other appropriate relief deemed fit by the Court. After hearing both parties, the Court directed the immediate release of the detained goods and vehicle upon furnishing a bank guarantee. The tax authorities were instructed to finalize adjudication proceedings promptly, considering the petitioner's contentions regarding the clerical error and addressing the matter within six weeks.

This judgment provides a detailed analysis of the issues surrounding the seizure of goods and the vehicle by tax authorities, emphasizing procedural irregularities, lack of intention to evade tax, and the need for prompt resolution of the matter in favor of the petitioner.