2021 (3) TMI 371 - HC - GST

Requirement of furnishing Bond as directed by the HC earlier - whether the Bond should be accompanied by bank guarantee/security - seeking release of goods/vehicle on the basis of challan and bond - HELD THAT - It is very sad to note that, the respondent No.2 being an officer of the GST Department has no idea as to what is a bond and what is a bank guarantee . There is no good reason for the respondent No.2 to be wiser than what the Court - It is made clear that the goods shall be released on deposit of an amount of ₹ 18 Lakh and so far the balance amount of ₹ 52 Lakh towards fine is concerned, the writ applicant shall execute a bond to the satisfaction of the respondent No.2. There is a fine distinction between the bond and bank guarantee. Our order in the main matter is dated 08.02.2021. Almost one month has passed, but the respondent No.2 has not given effect to our order only because of his misconception of law. It is once against directed that the respondent No.2 to release the goods once the writ applicant deposits an amount of ₹ 18 Lakh towards the tax and penalty and executes a bond for the balance amount of ₹ 52 Lakh - application disposed off.

Summary

Issues: Clarification on the requirement of bond and bank guarantee for release of goods.

In this judgment by the Gujarat High Court, the applicant sought clarification that the "bond" mentioned in a previous order did not need to be accompanied by a bank guarantee/security for the release of goods/vehicle. The main matter involved a Special Civil Application where the Court ordered the provisional release of goods pending confiscation proceedings, with the applicant required to deposit ?18 Lakh towards tax and penalty, and execute a bond for the balance amount of ?52 Lakh. The Court noted the respondent No.2's lack of understanding regarding the distinction between a bond and a bank guarantee, emphasizing that the goods should be released based on the deposit and bond as specified by the Court. Despite the delay in compliance by respondent No.2, the Court refrained from further action. The Court reiterated its direction for the release of goods upon the specified deposit and bond execution. The Court instructed the learned AGP to clarify the consequences to respondent No.2 and emphasized that the bond required was in accordance with the law, distinct from a bank guarantee which necessitates collateral. The judgment clarified the requirement for a bond without a bank guarantee and disposed of the application accordingly.