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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Akil Kureshi, Sudesh Bansal, JJ.
Somnath Corporation & Ors. – Appellants
Versus
State Of Rajasthan & Ors. – Respondents
D.B. Civil Writ Petition No. 1558 of 2022
Decided On : 11-02-2022
GST - Seizure of Goods - Release of Goods on Conditions
Fact of the Case:
The petitioner sought to quash a notice and order of detention of a transport truck with goods by the State GST authorities. The consignment of cumin seeds from Gujarat was intercepted in transit through a State, and the petitioner was issued a show cause notice and the goods along with the vehicle were seized.
Finding of the Court:
The court opined that the vehicle and goods should be released on certain conditions, considering the perishable nature of the goods and the stranded transport vehicle. The respondents were directed to release the goods upon the petitioner depositing or furnishing a bank guarantee of a specified amount and furnishing a bond for the full value of the goods. The GST authorities were permitted to carry out assessment after issuing notice to the petitioner, and the petitioner's liability would be judged based on such assessment, subject to the right of appeal.
Issues: Seizure of goods by State GST authorities, release of goods on conditions, liability of the petitioner
Ratio Decidendi: The court considered the perishable nature of the goods and the stranded transport vehicle, and directed the release of goods on specified conditions to secure the tax and impose the maximum possible penalty. The court also allowed the GST authorities to carry out assessment and judge the petitioner's liability based on such assessment, subject to the right of appeal.
Final Decision: The petition was disposed of with directions for the release of goods upon fulfillment of specified conditions by the petitioner, and for the GST authorities to carry out assessment and judge the petitioner's liability based on such assessment, subject to the right of appeal.
JUDGMENT
1. The petitioner has prayed for quashing a notice dated 21.01.2022 and the order of detention of the transport truck with goods which was done by the State GST authorities. The case of the petitioner is that a consignment of cumin seeds originating from Gujarat was in transit through a State, final destination being in Uttar Pradesh. It was intercepted by the GST authorities at Jaipur on the ground that driver of the vehicle did not carry valid document. The petitioner was issued a show cause notice and the goods along with vehicle have been seized, hence the petition.
2. In our opinion subject to the assessment, the vehicle and the goods should be released on certain conditions which power in any case the respondents have under the State GST act. at the very best the expectation of the department could be to tax the goods and impose maximum possible penalty. as long as these amounts are secured, no purpose would be served in taxing the goods in the vehicle. The goods are perishable and the transport vehicle has been stranded.
3. We are informed that the value of goods is approximately Rs.24.84 lacs on which applicable tax would come to approximately Rs.1.24 lacs. Considering 200% maximum imposable penalty on such basic tax amount, the round figure that would come to inclusive of possible tax and highest penalty is Rs.3.75 lacs.
4. Under the circumstances the respondents shall release the goods on (i) the petitioner either depositing under protest or furnishing a bank guarantee to the tune of Rs.3.75 lacs before the respondent No.2 and (ii) also furnishes a bond for the full value of the goods. as soon as these conditions are fulfilled the vehicle and the goods shall be released forthwith. The GST authorities may carry out assessment after issuing notice to the petitioner. The liability of the petitioner shall be judged on the basis of such assessment subject to right of appeal.
5. With these directions the petition is disposed of.
The appellate authority must consider all objections raised by the petitioner regarding the nature of goods to ensure lawful detention and imposition of tax.
The court affirmed the right to a hearing before the seizure of property, emphasizing the need for due process in administrative actions.
No provisional release of seized vehicle under Sections 129/130 CGST Act pending confiscation proceedings.
Detention and seizure of goods in transit under GST requires clear evidence of contravention; mere discrepancies in documentation cannot justify such actions.
The authority must have jurisdiction to impose penalties; lack of proper authority invalidates orders regarding the detention and valuation of goods.
The court cannot entertain writ petitions against show cause notices; such matters must be verified by the competent authorities.
The court held that writ petitions against show cause notices are not entertained, emphasizing the need for competent authorities to investigate the facts and circumstances of each case.
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