2021 (7) TMI 650 - HC - GST

Release of seized vehicle alongwith the goods - validity of one of the e-way bills had expired - for another consignment, no e-way bill was generated - HELD THAT - The appellate authority has given the first date of hearing in the month of September, 2021. In the meantime, the assessing officer is demanding full recovery of tax and penalty before releasing the vehicle and the goods. The petitioner has therefore approached this Court for release of the same. Considering the facts of the case and in particular, the fact that the petitioner has preferred appeal against the order of assessment after making pre-deposit of ₹ 64,870/-, if the petitioner provides bank guarantee for 25% of the disputed tax and penalty (inclusive of the pre-deposit which is already made), the vehicle and the goods should be released. The petition is disposed of with a direction that the petitioner shall furnish an unconditional bank guarantee of ₹ 2,60,000/- in favour of the department - Petition disposed off.

Issues:
1. Validity of e-way bills for transporting electronic goods.
2. Levying of State and Central GST with penalties.
3. Demand for full recovery of tax and penalty before releasing the vehicle and goods.
4. Appeal process and pre-deposit requirements.
5. Release of vehicle and goods pending appeal.

Analysis:
1. The petitioner, a transporter, had his vehicle intercepted at a check post due to expired e-way bills and missing e-way bills for electronic goods bound for Agartala, Tripura. The petitioner explained that a breakdown led to delays, causing the expiration of one e-way bill, although a new one was generated. The assessing officer issued a notice for levying State and Central GST with penalties, leading to a total liability of &8377; 12,97,000. The petitioner appealed after depositing 10% of the disputed tax as required by law, but the appellate authority scheduled the first hearing for September 2021.

2. The Court acknowledged the petitioner's appeal and pre-deposit, recognizing the delay in the appeal process and the assessing officer's demand for full recovery of tax and penalty before releasing the vehicle and goods. In light of these circumstances, the Court directed the petitioner to provide an unconditional bank guarantee of &8377; 2,60,000, equivalent to 25% of the disputed tax and penalty, including the pre-deposit already made. Once this condition is met, the vehicle and goods will be released, with the bank guarantee remaining valid until the appeal is concluded by the appellate authority.

3. The judgment emphasized the importance of balancing the interests of the petitioner and the tax authorities, ensuring compliance with legal requirements while facilitating the release of the goods pending the appeal process. By requiring a bank guarantee, the Court aimed to address the concerns of both parties, allowing for the release of the vehicle and goods while safeguarding the revenue interests of the department. This decision provided a practical solution to the immediate issue at hand, enabling the petitioner to continue operations while the appeal is pending resolution.

4. Overall, the judgment exemplified a judicious approach to resolving disputes in tax matters, taking into account the complexities of transportation logistics and compliance with GST regulations. By providing a clear directive for the petitioner to furnish a bank guarantee, the Court struck a balance between the petitioner's need for immediate relief and the department's legitimate interests in tax collection. This nuanced decision underscored the Court's commitment to upholding the rule of law while ensuring fairness and efficiency in the adjudication of tax-related disputes.

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