2021 (1) TMI 254 - HC - GST

Detention of vehicle alongwith the goods - Appealable order or not - violation of Rule 138 of the GST Rules - detention on the ground that E-Way bill issue had expired few hours before the vehicle was detained - HELD THAT - When the procedure required under the said provision has been apparently followed, an interference under Article 226 is not warranted. The legislative scheme discernible from Section 129 of the Act contemplates compliance of natural justice. Since after detention, Ext.P6 notice was issued and an order was passed after giving an opportunity of being heard, this Court is prima facie of the view that this is not a fit case to invoke Article 226 of the Constitution of India. In such circumstances, it is ideal to relegate the petitioner to the appellate remedy available under Section 107 of the Act. However, since the goods have been detained and has been lying under detention, the same can be released if the petitioner furnishes a bank guarantee, for the amount demanded in Ext.P8 within one week from today. If the petitioner furnishes a Bank Guarantee for the entire amount demand in Ext.P8 within seven days from today, the goods and vehicle detained under Ext.P8 order shall be released to the petitioner forthwith. If the petitioner fails to file an appeal within the period prescribed under the law, the Bank Guarantee can be encashed. Petition disposed off.

Summary

Issues:
Challenging detention order under Section 129(3) of the Central Goods and Services Tax Act, 2017; Invocation of extraordinary jurisdiction under Article 226; Compliance with natural justice under Section 129 of the Act; Applicability of appellate remedy under Section 107 of the Act.

Analysis:
The petitioner contested the detention of their vehicle under Section 129(1) due to an expired E-Way bill issue, challenging orders Exts.P5, P6, and P8. The petitioner argued that the respondent's order under Section 129(3) was arbitrary and lacked consideration of objections raised, seeking intervention through Article 226 jurisdiction. The counsel highlighted the absence of a reasoned order and excess of jurisdiction in passing Ext.P8, emphasizing the need for judicial interference.

The Senior Government Pleader pointed out Section 107 of the Act as the appropriate remedy available to the petitioner. Ext.P8, being an order under Section 129(3), is appealable under Section 107, with the Court having the discretion to intervene in exceptional cases of detention orders. However, the Court noted that Section 129 constitutes a self-contained mechanism, requiring compliance with natural justice. Given that due process was followed, including issuing Ext.P6 notice and providing a hearing, the Court deemed it inappropriate to invoke Article 226, directing the petitioner to pursue the appellate remedy under Section 107.

Despite upholding the detention, the Court allowed for the release of the goods upon the petitioner furnishing a bank guarantee for the demanded amount within a week. Failure to appeal within the prescribed period would result in encashment of the bank guarantee. Conversely, filing an appeal would suspend encashment until appeal disposal. The Court emphasized the necessity of filing any appeal in accordance with the law, ultimately disposing of the writ petition accordingly.