2021 (2) TMI 627 - HC - GST

Release of goods - Sale of goods through broker - Broker is not tracable - Purchaser refused to admitting the transaction with the applicant - HELD THAT - The argument of Mr. Sheth is that he is the seller of the goods. He has generated the E-way bill, ultimately, he will have to show the transaction in the assessment proceeding as E-way bill has been generated. Let the proceedings with respect to the confiscation proceed further in accordance with law. We are not inclined to interfere at this stage. However, we are inclined to order provisional release of the goods pending the confiscation proceedings on the condition that the writ applicant shall deposit an amount of ₹ 18 Lakh with the respondent No.2 towards the tax and penalty. For the balance amount towards fine of ₹ 52 Lakh, the writ applicant shall execute a bond to the satisfaction of the respondent No.2 with an undertaking that ultimately, if the goods are held liable to be confiscated, he shall make good the entire payment towards fine in lieu of confiscation. Application disposed off.

Summary

Issues:
1. Dispute over transaction acknowledgment between parties
2. E-way bill generation and assessment proceedings
3. Allegation of goods intended for gray market disposal
4. Provisional release of goods pending confiscation proceedings

Analysis:
1. The judgment revolves around a dispute where one party, M/s. M. M. Enterprise, denies acknowledging a transaction with the writ applicant. The respondent stated that the partner of M/s. M. M. Enterprise does not even know the petitioner. The court noted the lack of admission and the involvement of a broker in such transactions, leading to uncertainty regarding the transaction's authenticity.

2. The petitioner, Mr. Sheth, claimed to be the seller of the goods and emphasized the significance of generating the E-way bill. He argued that the transaction would need to be reflected in the assessment proceedings due to the E-way bill's generation. Conversely, Mr. Dave, representing M/s. M. M. Enterprise, contended that the lack of acknowledgment from the enterprise suggested a potential gray market disposal of the goods, raising suspicions regarding the transaction's legitimacy.

3. The court decided not to interfere in the confiscation proceedings at that stage but ordered the provisional release of the goods under certain conditions. The writ applicant was directed to deposit ?18 Lakh towards tax and penalty with the respondent No.2 for the provisional release. Additionally, a bond for the balance amount of ?52 Lakh was required, ensuring payment towards the fine if the goods were liable for confiscation. The judgment concluded by disposing of the writ application and directing the respondent No.2 to release the goods upon fulfilling the specified conditions.

4. Ultimately, the judgment addressed the conflicting claims regarding the transaction, the importance of proper documentation like E-way bills in assessment proceedings, and the provision for provisional release of goods pending confiscation proceedings based on the fulfillment of specified financial obligations and conditions set by the court.