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2020 (2) TMI 374 - HC - GSTSeizure of goods alongwith conveyance - requirement to furnish bank guarantee equivalent to the amount of his liability - Section 129 of UPGST Act - HELD THAT - The scheme of Section 129 of the UPGST Act, 2017 is the most reliable guide of the legislative intent. Section 129 of the UPGST Act, 2017 contemplates a comprehensive scheme with a summary procedure for release of goods and conveyances seized in transit. The legislative intent is to secure revenue interests and equally to ensure expeditious release of the seized goods and conveyances. This procedure is distinct from the adjudicatory process of determination of tax liability. It is admitted by the State Revenue that the petitioner had furnished a security in the form of a bank guarantee, equivalent to the amount payable under clause (a) of section 129(1) of the UPGST Act, 2017, upon demand made by the Revenue to furnish such security of like amount. The security in the form of a bank guarantee so furnished upon demand to the satisfaction of the State Revenue Authorities is clearly relatable to Section 129 (1)(c) of the UPGST Act, 2017 - The seized vehicle and goods have been released on the strength of such security deposit. Hence, the proceedings taken out under section 129 of the UPGST Act, 2017 are liable to be concluded in view of section 129 (5) of the UPGST Act, 2017 - Clearly the notice under Section 129(3) of the UPGST Act, 2017, dated 4th December, 2019 is infructuous and the proceedings taken thereunder are liable to be treated as concluded. Petition disposed off.
Issues:
1. Compliance with the judgment of the Hon'ble Supreme Court in M/s Kay Pan Fragrance Pvt. Ltd. 2. Interpretation and application of Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017. 3. Validity of the order dated 4th December, 2019 directing the petitioner to furnish a bank guarantee. Analysis: Issue 1: Compliance with Supreme Court Judgment The High Court noted that the order dated 4th December, 2019 was issued in compliance with the judgment of the Hon'ble Supreme Court in M/s Kay Pan Fragrance Pvt. Ltd. The Supreme Court's judgment emphasized adherence to statutory provisions over High Court orders that deviate from such provisions. The High Court highlighted the need for authorities to process claims strictly as per statutory requirements, disregarding any contrary High Court orders. Issue 2: Interpretation of Section 129 of UPGST Act, 2017 Section 129 of the UPGST Act, 2017 outlines a summary procedure for the detention, seizure, and release of goods and conveyances in transit. It mandates the issuance of a notice specifying tax and penalty, with provisions for payment or security equivalent to the amount payable. The scheme aims to ensure expeditious release of seized goods while protecting revenue interests. Once the required amount is paid or security furnished, proceedings initiated under Section 129(3) are deemed concluded, allowing for the swift release of goods. Issue 3: Validity of the Order for Bank Guarantee The High Court found that the petitioner had already furnished a bank guarantee in compliance with the requirements of Section 129(1)(a) and (c) of the UPGST Act, 2017 before the order dated 4th December, 2019. As the goods were released based on this security deposit, the subsequent order directing the petitioner to furnish another bank guarantee was deemed infructuous. The High Court held that the proceedings under Section 129 were to be considered concluded, and directed the Revenue Authorities to adjudicate the case on merits expeditiously. In conclusion, the High Court disposed of the writ petition, directing the Revenue Authorities to adjudicate the case promptly within three months and specifying that the existing bank guarantee shall remain with the authorities pending the outcome of the adjudication.
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