Goods and Vehicle Released Against Bank Guarantee: Rajasthan High Court

Smt. Usha W/o Shri Tarun Vs Union of India (Rajasthan High Court)

Summary: The Rajasthan High Court dealt with a writ petition challenging a notice dated 03.09.2026 issued under Section 130 of the CGST/RGST Act, 2017 concerning Vehicle No. HR-84-2165 carrying Soyabean Refined Oil. The petitioner, proprietor of M/s Madhav Cotton and Oils Mill, Charkhi Dadri, Haryana, had purchased the goods from M/s Agarwal Rice & Oil Mill, Hindon City, Karauli, under Tax Invoice No. 329 dated 27.08.2026. The vehicle was intercepted at MIA, Alwar, when the driver produced the tax invoice, e-way bill and other transport documents, and the goods corresponded with those documents in description and quantity. The proceedings were principally founded on alleged route deviation, absence of toll/RFID entries, assumptions regarding transit time and previous RFID movements.

The petitioner argued that neither Section 68 nor Rule 138A prescribed a particular route or required passage through specified toll plazas and relied upon Karnataka Traders v. State of Gujarat and M/s Exide Industries Ltd. v. Addl. Commissioner. It was contended that absence of toll/RFID data did not establish a GST contravention or intent to evade tax. During hearing, however, the petitioner confined the relief to release of the goods and vehicle and undertook to furnish a bank guarantee equivalent to the probable tax liability and applicable penalty. The High Court held that the revenue’s interest could be safeguarded through such security without prejudicing the pending proceedings. It consequently directed the competent authority to communicate the required bank guarantee amount and ordered that, upon furnishing the guarantee to its satisfaction, the vehicle and goods loaded therein be released forthwith.