HC allows Statutory Appeal Without Pre-Deposit; Goods & Vehicle Released on Bank Guarantee

Rajda Industries & Exports Private Limited & Anr. Vs The State of West Bengal & Ors. (Calcutta High Court)

In Rajda Industries & Exports Private Limited vs. The State of West Bengal, the Calcutta High Court addressed a petition challenging a penalty imposed under Section 129(3) of the CGST/WBGST Act, 2017. The petitioners’ vehicle and goods were detained on January 9, 2024, due to the lack of an E-Way bill. They secured the release of the goods by providing bonds and a bank guarantee, as per the Act. The petitioners argued that the penalty determination was unjust and sought to have the order set aside. The State argued that the petitioners should pursue an appeal under Section 107 of the Act. The Court agreed, noting that the petitioners have an alternative appellate remedy. It instructed the petitioners to approach the appellate authority within 15 days. The Court clarified that the bonds and bank guarantee provided would cover the penalty, negating the need for additional pre-deposit payments. The appellate authority was directed to resolve the appeal on merits within eight weeks. The writ petition was disposed of with these directions, and the Court allowed for urgent certified copies of the order upon request.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. Affidavit of service filed in Court today is taken on

2. The present writ petition has been filed, inter alia, challenging the order dated 20^th January, 2024 passed under Section 129(3) of the CGST/WBGST Act, 2017 (hereinafter referred to as the “said Act”).

3. It is the petitioners’ case that the petitioners vehicle along with the goods were intercepted on 9^th January, 2024, inter alia, on the ground that E-Way bill not tendered for goods in movement.

4. Mr. Ray, learned advocate appearing on behalf of the petitioners by drawing attention of this Court to the show cause notice issued in Form GST MOV-07 dated 13^th January, 2024 would submit that inasmuch as part-B of the E-Way bill had not been disclosed that the goods had been detained. According to the petitioners, the petitioners had got the goods released by securing the entire penalty by way of bonds and bank guarantee in terms of the provisions contained in Section 129 of the said Act. Such fact would corroborate form the letter dated 20^th January, 2024, under cover whereof the bond in Form GST MOV -08 and the Bank guarantee issued by the Kotak Mahindra Bank was submitted with the Assistant Commissioner of State Tax, Bureau of Investigation (South Bengal), Kharagpur Zone. It is submitted that that determination of penalty cannot be sustained. The petitioner under compelling circumstances had secured the penalty to get the goods released. The order impugned in the writ petition cannot be sustained and should be set aside.

5. At this stage Mr. Siddiqui, learned advocate appearing on behalf of the State respondents, however, would submit that the petitioners have an alternative remedy in the form of an appeal under Section 107 of the said Act. This Court, ordinarily, ought not to entertain the writ petition of this nature.

6. Having heard the learned advocates appearing for the respective parties and taking note of the fact that the petitioners have an alternative remedy in the form of an appeal, I am of the view that at the first instance, the petitioners should approach the appellate authority.

7. Although, Mr. Ray, learned advocate expresses his apprehension that the petitioner would be required to make further payment for maintaining the appeal in terms of the proviso to Section 107(6) of the said Act, I am of the view, that such apprehension is unfounded. Already, the entire penalty is covered by the bonds and bank guarantee. So long such bonds and bank guarantee are valid, there cannot be any question of the appellate authority once again calling upon the petitioners to make payment of pre-deposit in terms of the proviso to Section 107(6) of the said Act.

8. Having regard to the aforesaid, the writ petition is disposed of with a direction that in the event the petitioners approach the appellate authority within 15 days from date, the appellate authority having due regard to the pendency of the writ petition before this Court shall hear out and dispose of the appeal on merits within a period of eight weeks from the date of communication of this order without insisting for pre-deposit.

Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.