2022 (3) TMI 350 - HC - GST

Release of goods alongwith vehicle - seizure on the ground that driver of the vehicle did not carry valid document - HELD THAT - Subject to the assessment, the vehicle and the goods should be released on certain conditions which power in any case the respondents have under the State GST Act. At the very best the expectation of the department could be to tax the goods and impose maximum possible penalty. As long as these amounts are secured, no purpose would be served in taxing the goods in the vehicle. The goods are perishable and the transport vehicle has been stranded. The value of goods is approximately ₹ 24.84 lacs on which applicable tax would come to approximately ₹ 1.24 lacs. Considering 200% maximum imposable penalty on such basic tax amount, the round figure that would come to inclusive of possible tax and highest penalty is ₹ 3.75 lacs. The respondents shall release the goods on (i) the petitioner either depositing under protest or furnishing a bank guarantee to the tune of ₹ 3.75 lacs before the respondent No.2 and (ii) also furnishes a bond for the full value of the goods. As soon as these conditions are fulfilled the vehicle and the goods shall be released forthwith. The GST authorities may carry out assessment after issuing notice to the petitioner. The liability of the petitioner shall be judged on the basis of such assessment subject to right of appeal - the petition is disposed of.

Summary

Issues:
Petition to quash notice and detention order by State GST authorities regarding a consignment of cumin seeds in transit.

Analysis:
The petitioner sought to quash a notice and detention order issued by the State GST authorities concerning a transport truck carrying a consignment of cumin seeds. The consignment, originating from Gujarat and destined for Uttar Pradesh, was intercepted in Jaipur due to the driver lacking valid documents. The petitioner argued that the goods and vehicle were seized unjustly, prompting the petition.

The court opined that, pending assessment, the authorities should release the vehicle and goods under certain conditions within their powers under the State GST Act. The department's objective might be to tax the goods and levy the maximum penalty. However, as long as these amounts are secured, taxing the goods in the vehicle would serve no purpose, especially considering the perishable nature of the goods and the stranded transport vehicle.

The court was informed that the goods' value was approximately ?24.84 lacs, with an applicable tax of around ?1.24 lacs. Taking into account a 200% maximum penalty on the basic tax amount, the total amount, including possible tax and the highest penalty, would be ?3.75 lacs.

Consequently, the respondents were directed to release the goods upon the petitioner either depositing or furnishing a bank guarantee of ?3.75 lacs before the concerned authority, in addition to providing a bond for the full value of the goods. Once these conditions were met, the vehicle and goods were to be released immediately. The GST authorities were permitted to conduct an assessment after notifying the petitioner, with the petitioner's liability determined based on such assessment, subject to the right of appeal.

With these directives, the petition was disposed of by the court.