2019 (7) TMI 679 - HC - GST

Detention order - there is an omission or illegality in transportation of goods - Section 129 (1) of KGST Act, 2017 - HELD THAT - The issues raised are at preliminary stage and this Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage. To confirm to the scheme under the Act, the writ petition is disposed of by this order. The petitioner submits bank guarantee for the tax and penalty as shown in Ext.P12 and applies for release of goods by enclosing a copy of this order within two days from today. The respondent shall release the goods detained under Ext.P11 and subjected to enquiry in Ext.P12 within twelve hours from the date and time of receipt of bank guarantee.

Summary

Issues:
Challenge to detention order under Section 129 (1) of KGST Act, 2017 and notice under Section 129 (3) of the Act; Maintainability of the writ petition; Compliance with requirements of the Act; Bank guarantee for tax and penalty; Release of detained goods.

Analysis:

The petitioner contested the legality and jurisdiction of Exts.P11 and P12 notices issued by the respondent, which included an order of detention under Section 129 (1) of the KGST Act, 2017, and a notice under Section 129 (3) of the Act. The petitioner argued that the subject matter of the notices was compliant with all Act requirements, and the petitioner could demonstrate the generation and production of Part B/E-Way Bill for inspection, making the current proceedings through Exts.P11 and P12 unnecessary and illegal.

The Government Pleader objected to the maintainability of the writ petition, highlighting an alleged omission or illegality in the transportation of goods. It was pointed out that the transporter failed to produce all required documents during the inspection, leading to the detention order. The Government Pleader emphasized that Section 129 of the Act not only allows for detention but also provides for the release of goods upon compliance with its provisions. The petitioner could secure the release by furnishing a bank guarantee for the demanded tax and penalty amount, ensuring the detained goods' prompt release.

In response, the petitioner's counsel acknowledged the willingness to provide the bank guarantee but expressed concerns about the authority not issuing final orders, leading to the continuous need to maintain the bank guarantee. The counsel also raised issues regarding the substantial commission charged by the banker for the guarantee, causing losses to the petitioner without valid reasons.

After considering the arguments presented, the Court disposed of the writ petition, stating that the issues raised were at a preliminary stage and not suitable for adjudication on merits at that point. The Court emphasized adherence to the Act's scheme and directed the petitioner to submit a bank guarantee for tax and penalty as per Ext.P12 for the release of the detained goods within a specified timeframe. The respondent was ordered to release the goods and complete the enquiry process within defined timelines, failing which the petitioner would not be obligated to maintain the bank guarantee beyond a specified period.