2021 (12) TMI 474 - HC - GST

Seizure of goods alongwith the vehicle - undervlauation of goods - enhancement of value - best judgement assessment - sub-rule (5) of Rule 138 of the CGST Rules, 2017 - HELD THAT - The matter requires consideration. Subject to the petitioners depositing the penalty and tax to the extent of 50% of the amount claimed, and furnishing security of the remaining 50% of penalty, other than cash and bank guarantee to the satisfaction of the authority in the prescribed manner and in terms of Section 129(1)(a) of the Act, within a period of two weeks from today, the goods and vehicle may be released in favour of the petitioners.

Issues: Challenge to order under Section 129(3) of the Central Goods and Services Act, 2017

The judgment delivered by Hon'ble Jayant Banerji, J. of the Allahabad High Court pertains to a writ petition challenging the order dated 23.11.2021 passed by the Additional Commissioner Grade-II (Appeal) Second, Trade Tax, Kanpur. The order under challenge upheld the decision of the proper authority under Section 129(3) of the Central Goods and Services Act, 2017, resulting in the dismissal of the appeal filed by the petitioners. The petitioners contended that despite having supporting documents for the goods being transported, including invoices and goods receipts, the e-way bill was generated after the interception of the conveyance. The petitioners argued that the valuation of goods was enhanced based on best judgment assessment, alleging undervaluation. The counsel for the petitioners cited previous interim orders by the High Court directing the release of goods and vehicles in similar cases. On the other hand, the Standing Counsel opposed the petition, citing the necessity of an e-way bill under Rule 138 of the CGST Rules, 2017, to demonstrate vehicle numbers for transporting goods, especially when the vehicle was changed during transit. The court granted time for filing counter and rejoinder affidavits, and subject to depositing 50% of the claimed amount as penalty and tax, along with providing security for the remaining 50%, the goods and vehicle were ordered to be released to the petitioners.

This judgment involves the interpretation and application of provisions under the Central Goods and Services Act, 2017, particularly Section 129(3) and Rule 138 of the CGST Rules, 2017. The primary issue revolves around the timing of generating the e-way bill in relation to the interception of the conveyance transporting goods and its impact on the assessment of valuation by the authorities. The petitioners argued that the seizure proceedings were initiated despite having valid supporting documents, raising concerns of undervaluation based on the authority's judgment. The court will have to analyze whether the timing discrepancy in presenting the e-way bill justifies the enhanced valuation and seizure of goods, considering the precedents cited by the petitioners from previous court orders directing release in similar cases. On the other hand, the Standing Counsel's argument emphasizes the mandatory requirement of an e-way bill under Rule 138 and the presumption drawn due to the change in the transporting vehicle. The court will need to assess the validity of this argument in the context of the specific circumstances of the case and the legal provisions cited.

Another crucial aspect of this judgment is the consideration of precedents set by previous interim orders of the High Court in similar matters. The petitioners relied on orders directing the release of goods and vehicles in comparable situations, highlighting a consistent approach by the court in such cases. The court will need to evaluate the relevance and applicability of these precedents to the present case and determine whether the circumstances warrant a similar outcome based on past decisions. This analysis will involve a detailed examination of the facts and legal principles involved in the previous orders, along with a comparison to the current case to ensure consistency and fairness in judicial decisions. The court's assessment of these precedents will play a significant role in shaping the final decision regarding the release of goods and vehicles to the petitioners, based on established legal principles and past judicial interpretations.

← Previous Next →