2020 (6) TMI 380 - HC - GST

Release of detained goods alongwith vehicle - Section 129 (3) of the CGST Act/SGST Act - HELD THAT - While permitting the petitioner to serve the respondent nos. 2 and 3 both by an e-mode, considering the issue of closure of the business in the pandemic for a long time and also bearing in mind the material which is being carried from Goa Unit of the petitioner to Sanand, Ahmedabad, for preparing one of the necessaries and also noticing that there are two units within the state of Gujarat of the Petitioner registered with the Respondent authorities, we are inclined to accede to the request of release of the goods with truck bearing No. GJ-01-CU-7154 detained in exercise of the powers, pending the service of notice and admission of this matter, subject to the deposit of the entire amount of tax of ₹ 14,53,788/- with the department within three days and also the deposit of ₹ 1.45 lakhs, 10% of amount of penalty for now with the department, by way of a bank guarantee, initially for the period of 90 days or till the pendency of Petition, whichever is later. On deposit of total amount of tax and furnishing of the bank guarantee with the department within three days as directed, the release of the truck shall be made within 48 hours, with the goods subject to the furnishing of proof of such amount with the respondent no. 2 or 3.

Summary

Issues:
Petition challenging showcause notice under Section 129 of the GST Act for minor mismatch in address on invoices and E-way bill.

Analysis:
The petitioner, a company with a single GST registration for its factory and warehouse, faced detention of goods due to an inadvertent address mismatch on the E-way bill during transportation. The showcause notice issued under Section 129(3) of the CGST Act/SGST Act was contested by the petitioner, arguing that such powers should be exercised for major discrepancies, not minor technical errors. The petitioner sought release of goods detained on the grounds of urgency for production during lockdown.

The Court heard arguments from both parties and directed the petitioner to deposit the entire tax amount and a penalty as a bank guarantee. The respondent highlighted the availability of alternative remedies and suggested a penalty amount of 100% of the tax, while the petitioner proposed a lower penalty of &8377; 1,000 or 10% of the tax amount. The Court considered the pandemic situation, the necessity of goods for production, and the petitioner's compliance readiness.

In consideration of the circumstances, the Court allowed the release of the detained goods pending notice service and admission of the matter. The petitioner was instructed to deposit the tax amount and a portion of the penalty as a bank guarantee within three days. The release of the truck was contingent upon proof of deposit and cooperation with the showcause notice hearing scheduled for 16.06.2020. Direct service through e-mode was permitted for notice delivery.