Detention under GST:  Out of two e-way bills validity of one expired – Conditional release by Tripura HC

ATC Supply Chain Solution Pvt. Ltd. Vs. The State of Tripura & Ors (Tripura High Court)

Disposing WP(C) No.433/2021, Dated: 30^th June, 2021 in ATC Supply Chain Solution Pvt. Ltd. Vs. The State of Tripura & Ors, the Hon’ble High Court of Tripura, granted a conditional release of goods & vehicle detained U/s. 129 of the CGST/SGST Acts, 2017.

Facts of the case

Petitioner is a transporter(GTA) and the goods being transported by them along with the vehicle have been detained by the State GST authorities at Churaibari border on the ground that out of the two e-way bills generated by the petitioner validity of one of them had expired. In fact, one of the bills had validity up to 22^nd June, 2021. On account of the vehicle in which the goods were being transported breaking down in Assam there was some delay in crossing the State border. The vehicle and the goods arrived at the northern State border of the State of Tripura on 23^rd June, 2021. The petitioner had generated a fresh e-way bill which has the validity up to 9^th July, 2021. However, in the meantime, the GST authorities have detained the goods and the vehicle at the check post. According to the petitioner there was no intention on part of them to evade payment of duty and in fact, the consignee has paid the full tax of ₹1,78,283.00 on the value of the goods. It is also argued that the goods are in the nature of Amul Butter and detention of such goods at the border check post under unprotected conditions would damage the goods as the product is perishable. Under the circumstances the only request of the petitioner was that the vehicle and the goods may be released on some reasonable conditions.

Held by the Court

Considering the circumstances of the case, the court was of the opinion that further continued detention of the vehicle and the goods would serve no purpose. The vehicle with the goods can be released on certain terms and conditions. While permitting the GST authorities to carry on assessment if the competent authority is of the opinion that there has been any infraction of any rules, regulations or statutory requirement. However, pending such adjudication the goods and the vehicle are ordered to  be released subject to the following conditions;

• The petitioner shall either deposit or give Bank guarantee to the tune of 25% of possible duty with penalty. For such purpose, respondent concerned, shall convey to the petitioner within 2(two) days the possible amount of duty with penalty that may ultimately be imposed even if the petitioner’s explanations are not accepted.
• The petitioner shall furnish bond for the remaining amount of probable duty with penalty.
• As soon as the petitioner fulfils these two conditions, the vehicle and the goods shall be released.
• It would be open for the competent authority to carry on adjudication, on the question of unpaid duty with interest and penalty if any.
• The petitioner shall cooperate with such proceedings if the competent authority issues a show cause notice in this respect.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Petitioner is a transporter. The goods being transported by the petitioner along with the vehicle have been detained by the State GST authorities at Churaibari border on the ground that out of the two e-way bills generated by the petitioner validity of one of them had expired. Learned counsel for the petitioner pointed out that one of the bills had validity up to 22^nd June, 2001. On account of the vehicle in which the goods were being transported breaking down in Assam there was some delay in crossing the State border. The vehicle and the goods arrived at the northern  State  border  of  the  State  of  Tripura  on  23^rd  June,  2021.  The petitioner had generated a fresh e-way bill which has the validity of up to 9^th July, 2021. However, in the meantime, the GST authorities have detained the goods and the vehicle at the check post. Counsel for the petitioner submitted that there was no intention on part of the petitioner to evade payment of duty. In fact, the consignee has paid the full tax of Rs.1,78,283/- on the value of the goods. He further submitted that the goods are in the nature of Amul Butter. Detention of such goods at the border check post under unprotected conditions would damage the goods as the product is perishable. He, therefore, submitted that the vehicle and the goods may be released on some reasonable conditions.

We have also heard learned senior counsel Mr. P K Dhar appearing for the State authorities on advance copy.

Considering the submissions made by the counsel for the petitioner we are of the opinion that further continued detention of the vehicle and the goods would serve no purpose. Let the vehicle with the goods be released on certain terms and conditions. While permitting the GST authorities to carry on assessment if the competent authority is of the opinion that there has been any infraction of any rules, regulations or statutory requirement. However, pending such adjudication the goods and the vehicle may be released.

Under  the   circumstances,  the   petition  is   disposed  of   with following directions :

(1) The petitioner shall either deposit or give Bank guarantee to the tune of 25% of possible duty with penalty. For such purpose, respondent No.3 shall convey to the petitioner within 2(two) days from today the possible amount of duty with penalty that may ultimately be imposed even if the petitioner’s explanations are not accepted.

(2) The petitioner shall furnish bond for the remaining amount of probable duty with penalty

(3) As soon as the petitioner fulfils these two conditions, the vehicle and the goods shall be released.

(4) It would be open for the competent authority to carry on adjudication, on the question of unpaid duty with interest and penalty if any.

(5) The petitioner shall cooperate with such proceedings if the competent authority issues a show cause notice in this respect.

Petition is disposed of. Direct service of the copy of order on the respondent No.3 is permitted. Pending application(s), if any, also stands disposed of.

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Author/Blogger:  Aji V. Dev, Advocate, High Court of Kerala at Aji V. Dev & Associates, Ernakulam, Kochi, available at ajivdev@yahoo.co.in/advajivdev@gmail.com/9447788404