2023 (4) TMI 907 - HC - GST

Detention of goods alongwith vehicle - fraudulent business activities - claiming fake ITC - section 129 of GST Act - HELD THAT - In view of the instruction received, it appears that the petitioner has not approached the authority, even though the authorities have expressed their view that the conveyance can be released on payment of penalty as per the demand order or after furnishing the bank guarantee of equal amount. Mr. Behura, learned counsel for the petitioner undertakes that the petitioner shall furnish the bank guarantee of equal amount within a period of two days, so that the authority can release the vehicle. It is made clear that if the petitioner fails to furnish the bank guarantee, it will be open to the opposite parties to confiscate the vehicle of the petitioner. So far the order impugned is concerned, since the same is appealable one, the petitioner is permitted to prefer appeal before the appellate authority in accordance with law - Petition disposed off.

Summary

Issues involved:
The issues involved in the judgment are related to the detention of a vehicle bearing registration number OR15R3871, discrepancies in the consigner's business activities, issuance of detention notice, show cause notice for penalty under Section 129(1)(b) of the GST Act, demand order raising a penalty of Rs. 9,57,600 under Section 129(3) of the GST Act, and the release of the conveyance on payment of penalty or furnishing a bank guarantee.

Detention of Vehicle:
The vehicle bearing registration number OR15R3871 was intercepted at Sergarh, Balasore, and discrepancies were noticed which required further verification. The driver's statement was recorded in Form-GST MOV-01, and the vehicle was directed to be stationed at the office premises. Subsequent verification revealed that the consigner was engaged in fraudulent business activities and claiming fake Input Tax Credit (ITC). A detention notice in Form GST MOV-06 was served on the driver, directing the vehicle to be stationed at the office premises.

Show Cause Notice and Demand Order:
A show cause notice in Form GST-MOV-07 was served on the driver to explain why penalty under Section 129(1)(b) should not be payable. No reply was furnished to the show cause notice, leading to the issuance of an order of demand in Form-GST-MOV-09, raising a penalty demand of Rs. 9,57,600 under Section 129(3) of the GST Act. Despite no response to the show cause notice or payment of the penalty, the conveyance remained detained.

Resolution and Disposal:
The petitioner had not approached the authority despite the option for release on payment of penalty or furnishing a bank guarantee. The petitioner's counsel undertook to furnish the bank guarantee within two days for the release of the vehicle. Failure to do so would allow the opposite parties to confiscate the vehicle. The petitioner was permitted to prefer an appeal before the appellate authority regarding the impugned order. The writ petition was disposed of accordingly.