2020 (9) TMI 249 - HC - GST

Release of detained goods alongwith vehicle, without insisting security deposit - attempt to evade tax or not - section 129 of CGST Act - HELD THAT - The goods and vehicle detained pursuant to Ext.P3 detention order shall be released by the 1st respondent to the petitioner on the petitioner furnishing bank guarantee for the value of the amounts shown in Ext.P3 order. Thereafter, the 1st respondent may finalise the adjudication proceedings pursuant to the impugned Ext.P3 detention order, after affording reasonable opportunity of being heard to the petitioner, through the counsel, if any and orders may be passed finalising the said proceedings, without much delay, preferably within a period of 4-6 weeks from the date of production of the certified copy of this judgment. Petition disposed off.

Summary

Issues Involved:
1. Detention of goods and vehicle by the 1st respondent under GST Act.
2. Petitioner's request for release of goods without insisting on a security deposit.

Analysis:

Issue 1: Detention of goods and vehicle under GST Act
The petitioner, an importer and exporter, purchased imported raw cashew and paid IGST. The goods were being transported when the original importer expressed interest in purchasing them after taking samples, leading to a change in the route to Kollam. However, the 1st respondent intercepted the vehicle and goods, issuing a notice under section 129(1) of the GST Act, demanding a security deposit. The petitioner contended that there was no tax evasion attempt and the goods were rerouted due to legitimate reasons. The petitioner sought release of the goods without the security deposit, claiming the demand was illegal. The High Court, after hearing both parties, ordered the release of the detained goods and vehicle upon the petitioner furnishing a bank guarantee for the amounts specified in the detention order. The 1st respondent was directed to finalize the adjudication proceedings promptly, granting a reasonable opportunity for the petitioner to be heard through counsel.

Issue 2: Petitioner's request for release without security deposit
The petitioner filed a Writ Petition seeking a writ of mandamus or other directions to release the goods and vehicle without insisting on a security deposit. The Court, after considering the submissions and materials on record, directed the release of the detained goods and vehicle upon the petitioner providing a bank guarantee. The Court emphasized the need for expeditious finalization of the adjudication proceedings related to the detention order, urging the 1st respondent to conclude the proceedings within a specified timeframe from the date of the judgment. The Court disposed of the Writ Petition with these directions and observations, ensuring a fair opportunity for the petitioner in the adjudication process.

This judgment from the Kerala High Court addresses the detention of goods under the GST Act, emphasizing the importance of due process and fair treatment for the petitioner while upholding the legal framework governing such detentions.