2022 (6) TMI 195 - HC - GST

Availability of alternative remedy of appeal - requirement of pre-deposit of 100% of penalty or 25% u/s 107 of CGST Act - Seeking release of goods vehicle - Physical verification/inspection of the conveyance, goods and documents issued in form GST MOV-2 - section 129 3 of the Central Goods and Services Tax Act, 2017 - HELD THAT - The petitioner has offered surety and furnished the bank guarantee for 100% of the penalty. The petitioner s remedy as against such order is under Section 107 of the CGST Act, and the petitioner can avail such remedy upon deposit of 25% of the penalty as contemplated under the proviso to Section 107 of the CGST Act. If the petitioner has obtained release of the vehicle against furnishing surety bond and bank guarantee 100% of the penalty and there is an order as contemplated under section 129 3 of the CGST Act, the petitioner, if aggrieved, must avail permitted remedy under Section 107 of the CGST Act. If the requirement in law is that the petitioner must deposit only 25% of the penalty to avail such remedy, the petitioner cannot be fastened with the responsibility to pay 100% - the writ petition stands disposed of with liberty to the petitioner to avail remedy under Section 107 of the CGST Act upon deposit of 25% of the penalty. Petition disposed off.

Summary

Issues:
1. Quashing of the order for physical verification/inspection of goods and documents
2. Release of goods vehicle in transit
3. Remedy under Section 107 of the CGST Act
4. Deposit of penalty for availing remedy
5. Return of surety bond and bank guarantee

Analysis:
1. The petitioner sought relief for quashing the order for physical verification/inspection of goods and documents along with directions to release the goods vehicle in transit. The court noted that an order was issued under section 129[3] of the CGST Act, and the conveyance was released against a surety bond and bank guarantee provided by the petitioner. The petitioner was informed to avail remedy under Section 107 of the CGST Act by depositing 25% of the penalty as per the proviso to Section 107.

2. The court emphasized that if the petitioner has obtained the release of the vehicle by furnishing a surety bond and bank guarantee for 100% of the penalty, the petitioner should only be required to deposit 25% of the penalty to avail the remedy under Section 107. Therefore, the writ petition was disposed of, granting the petitioner liberty to avail the remedy under Section 107 upon depositing 25% of the penalty.

3. Regarding the return of the surety bond and bank guarantee, the court ordered that upon filing an appeal with the required deposit, if the petitioner provides details of the appeal and deposit to the first respondent, the first respondent must return the bank guarantee/surety bond within ten working days. The court clarified that all contentions of the parties were left open for further proceedings.

In conclusion, the judgment focused on the petitioner's right to avail remedy under Section 107 of the CGST Act by depositing 25% of the penalty, the return of the surety bond and bank guarantee upon compliance with the deposit requirement, and the disposal of the writ petition with liberty granted to the petitioner for further legal actions.