2021 (12) TMI 224 - HC - GST

Validity of action of the respondent of detaining the goods and conveyance - declining the release of goods under Section 129 of the Central Goods and Service Tax Act, 2017 - HELD THAT - The fact that all other documents are in place and the issue is with regard to the pricing of the goods on a lower side which have been transported, the decision rendered in case of K.P.Sugansh Ltd. vs. State of Chhattisgarh 2020 (3) TMI 890 - CHHATTISGARH HIGH COURT requires to be regarded, where also, there was an allegation of undervaluation of the goods. At the time of the detention of the vehicle and the seizure of the goods in transit under the GST and where also the e-way bill and invoices were accompanied, the Court had not sustained the seizure of the goods and the vehicle. It permitted the department to initiate appropriate separate proceedings with regard to the alleged undervaluation, however, it held that undervaluation cannot be a ground for the seizure of the goods in transit by inspecting authorities if otherwise all other aspects are in order. The contention raised of the alternative remedy in that case was not entertained by holding that since the entire proceedings of the detention of the vehicle and seizure of goods were in contravention of law, relegating the petitioner to the alternative remedy would not be proper and justifiable. From the submissions of the learned advocates on both the sides and as ensured to this Court by the learned Assistant Government Pleader within four (4) weeks the assessment of the entire issue would be completed by the Assessing Officer after drawing the sample from the goods detained and therefore, keeping all contentions raised by both the sides open to be decided, it is deemed appropriate to direct release of the goods and the vehicle both by the respondents on the petitioner having shown its readiness to pay the amount of penalty and tax both and also having expressed his wish to cooperate - The matter is peremptorily fixed on 16.12.2021.

Summary

Issues:
Challenge to detention of goods and conveyance under Section 129 of the CGST Act, 2017.

Detailed Analysis:

1. Detention of Goods and Conveyance:
The petitioner challenged the detention of goods and conveyance under Section 129 of the CGST Act, seeking their release through various prayers. The petitioner, engaged in trading agriculture produce, had goods detained while transporting from Gujarat to Haryana. Despite having all necessary documents, the officer detained the vehicle and goods, leading to objections from the petitioner regarding the alleged arbitrariness in the detention process.

2. Compliance with CGST Rules:
The petitioner emphasized compliance with Rule 138(A) and 138(C) of the CGST Rules, requiring proper inspection and verification of goods under transit. The petitioner raised concerns about the non-issuance of detention orders, notices, and alleged confiscation despite willingness to pay penalties under Section 129 of the CGST Act.

3. Dispute Over Goods' Pricing:
The respondents contended that the detained goods were misrepresented as Jeera Patti instead of Premium Jeera, significantly undervaluing the goods. The authorities imposed tax and penalties based on the actual market value of the goods, leading to a dispute over pricing and subsequent detention of the goods and conveyance.

4. Legal Arguments and Court's Decision:
During the hearing, legal arguments were presented by both sides. The petitioner's counsel argued against on-road pricing decisions and urged cooperation for proper assessment. The Assistant Government Pleader defended the detention based on alleged undervaluation and emphasized the need for adjudication by the Assessing Officer.

5. Court's Ruling and Directions:
Considering all aspects and legal precedents, the Court directed the release of goods and conveyance upon payment of tax and penalties by the petitioner. The Court set a timeline for assessment by the Assessing Officer, emphasizing the completion of adjudication within four weeks. The Court also permitted the sampling of seized goods for laboratory testing but ensured that it would not delay the ongoing proceedings.

6. Future Proceedings and Monitoring:
The Court scheduled a follow-up hearing to monitor the adjudication process and directed the petitioner to furnish a bond for future liabilities. The authorities were instructed to release the conveyance promptly after payment and bond submission, ensuring compliance with legal obligations and procedural fairness.

This detailed analysis encapsulates the key issues, legal arguments, and the Court's decision in the judgment challenging the detention of goods and conveyance under the CGST Act, providing a comprehensive overview of the case.