Confiscated goods and vehicles can be released by depositing 25% of Tax: HC

Kanchan Supplier through its Proprietor Vs State of Punjab (Punjab and Haryana High Court)

Confiscated goods and vehicles can be released by depositing 25% of the amount mentioned in the Order in cash and furnishing a bank guarantee for the balance

Introduction: The Punjab and Haryana High Court, in the case of M/s. Kanchan Supplier v. State of Punjab and Ors., clarified significant aspects related to tax disputes and the rights of the assessee. This article delves into the details of the case, the court’s findings, and the implications of the judgment.

The Hon’ble Punjab and Haryana High Court in the case of M/s. Kanchan Supplier v. State of Punjab and Ors. [Civil Writ Petition No. 1629 of 2024 dated January 24, 2024] held that the Assessee has the right to appeal against the Order. Further, the vehicle and the goods confiscated shall be released upon furnishing 25% of the amount mentioned in the Impugned Order, and the outstanding balance shall be secured by furnishing a bank guarantee.

Facts:

M/s. Kanchan Supplier (“the Petitioner”) was a proprietorship concern situated in the State of Uttar Pradesh. They were issued a Notice in FORM GST MOV-02 dated December 26, 2023 (“the Impugned Notice-1”) and FORM GSTR MOV-10 dated January 02, 2024 (“the Impugned Notice-2”) without jurisdiction. The Impugned Notices were issued because it was found that the Petitioner’s supply chain had been verified to be ingenuine, and the purchases had been made at an earlier point in time. The said persons did not pay any tax, and it was found that bogus transactions were made to defraud the government exchequer.

The Petitioner did not appear before the Bench on January 16, 2024. After that, the matter was decided on the next date, and an Order was passed on January 18, 2024, under the FORM MOV-11 (“the Impugned Order”) to confiscate the goods and the vehicle. Further, penalty and fine were imposed under the Sections 130(1) and 130(2) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). The liability of penalty and fine was assessed at Rs. 5,33,004/- against the value of goods of Rs. 9,87,044/-.

Hence, aggrieved by the Impugned Order, the Petitioner has filed the present writ petition.

Issue:

Whether goods and vehicles can be released by depositing 25% of the amount mentioned in the Order in cash and furnishing a bank guarantee for the balance?

Held:

The Hon’ble Punjab and Haryana High Court in Civil Writ Petition No. 1629 of 2024-DB held as under: