2020 (7) TMI 74 - HC - GST

Requirement of Bank Guarantee for release of confiscated goods - HELD THAT - Admittedly the petitioner claims himself to be only the owner of the vehicle as a transporter and has shown his disclaimer on the goods. In view thereof, the revenue department would be free to auction the goods in terms of the Rules. However, if the petitioner submits the bank guarantee in terms of Rule 140, relating to the valuation of the vehicle, the revenue department would, upon satisfaction, release the vehicle to the petitioner. As owners of the goods are not presently before this court, no order in this regard is required to be passed. Petition disposed off.

Summary

Issues:
Petitioner's vehicle and goods confiscated, appeal rejected, seeking release of vehicle and against auctioning. Interpretation of Rule 140 of Central Goods and Service Tax Rules, 2017 regarding provisional release of seized goods. Dispute over requirement of bank guarantee for confiscated goods and vehicle.

Analysis:
The petitioner, a transporter, had his vehicle and goods confiscated, with his appeal being rejected. Despite the provision for a second appeal, the petitioner approached the court seeking the release of the vehicle and objecting to its auctioning. The revenue department, represented by counsel, cited a judgment of the Supreme Court and Rule 140 of the CGST Rules, stating that for interim custody of the confiscated vehicle, the said rule could be invoked. Additionally, reference was made to a previous court order concerning the acceptance of a security bond for the release of goods and vehicles.

The court noted the provisions of Rule 140, which allow for the provisional release of seized goods upon execution of a bond and submission of a bank guarantee equivalent to the applicable tax, interest, and penalty. The revenue authorities expressed willingness to release the vehicle if the petitioner complied with Rule 140 by submitting the required bank guarantee. However, the petitioner argued that as a transporter and not the owner of the goods, he should not be required to submit a bank guarantee for the confiscated goods, contending that it should only be necessary for the vehicle.

Considering the submissions, the court observed that the petitioner claimed ownership only of the vehicle as a transporter and disclaimed ownership of the goods. Consequently, the revenue department was deemed free to auction the goods. However, if the petitioner submitted a bank guarantee as per Rule 140 for the vehicle's valuation, the revenue department would release the vehicle upon satisfaction. As the owners of the goods were not present in court, no specific order regarding them was necessary, leading to the disposal of the writ petition accordingly.