2021 (7) TMI 1147 - HC - GST

Release of seized goods - levy of penalty - penalty levied although the matter is yet to be settled finally - goods are properly obtained through legitimate means or not - HELD THAT - This Court having heard learned counsel for the parties and also on perusal of the materials on record, is of the view that it is the mandate of law that at the time of release, not only the value of the goods but also the penalty as may be payable as per the authorities are liable to be paid for which the owner of the goods may have to execute a bond with security thereof and, as such, in the present case, directing the applicants to execute bond and furnishing Bank Guarantee of the amount mentioned in the said communication cannot be said to be beyond the purview of law. The applicants shall execute a bond and furnish Bank Guarantee in respect of the amount mentioned in the communication - Application allowed.

Summary

Issues:
Release of seized goods with imposition of penalty and conditions.

Analysis:
The present application was filed seeking the release of seized goods as per the court's previous order. The applicants argued that authorities were imposing unnecessary conditions for release, insisting on payment of penalty despite the matter not being settled. They claimed the goods were obtained legitimately and should not be subject to penalty. On the other hand, the Standing Counsel for GST cited Section 67(6) of the GST Act, stating that seized goods must be released upon payment of tax, interest, and penalty as prescribed by the statute. Referring to a Supreme Court judgment, it was emphasized that statutory provisions must be adhered to when releasing seized goods.

After hearing both parties and examining the evidence, the court concluded that the law mandates payment of both the value of the goods and any applicable penalty for their release. Therefore, directing the applicants to execute a bond and provide a Bank Guarantee for the specified amounts was deemed lawful and within the provisions of the relevant statutes. Consequently, the court allowed the application, ordering the applicants to execute a bond and furnish a Bank Guarantee for the tax payable and proposed penalty amount mentioned in the communication dated 17.03.2021. Upon compliance with these conditions, the seized goods were to be released, subject to the final outcome of the writ petition.

In summary, the court upheld the imposition of penalty and conditions for the release of seized goods, emphasizing the statutory requirements under the GST Act. The decision highlighted the necessity of complying with the law and prescribed procedures when releasing goods seized by authorities, ensuring that both the tax liability and penalty amounts are addressed before release.