Calcutta HC Allows Release of Seized Machinery on Bank Guarantee Amidst Legality Challenge

In a recent turn of events, the Calcutta High Court has allowed the release of machinery that was seized, on the provision of a bank guarantee.

DRB Infrastructure Pvt. Ltd. (DRB) is owner of the machinery. DRB is transporting this machinery from Arunachal Pradesh to Jammu through the state of West Bengal on two trailers through a third party consignment under Eway Bill for carrying out its sub-contract work for excavation, embankment/subgrade work and drain work on the four/six lane access-controlled expressway at Jammu in the State of Jammu Kashmir.

However, the West Bengal imposed ₹8.13,600 penalty for violation of the provisions of Section 31, 68 and Section 129(1) of the WBGST/CGST Act 2017 and Rules 45 and 55 of the WBGST/CGST Rules 2017 and seized the machinery.

Following the seizure, DRB Infrastructure Pvt. Ltd filed a writ application, seeking directions for the release of the trailers loaded with machines/equipment.

DRB has challenged the legality of the seizure, and represented that its work is getting hampered without the machinery, leading to this interim decision by the court.

The court has now allowed for the release of the seized machinery, albeit with the condition of a bank guarantee.

This case highlights the legal complexities that can arise in the context of seizures and the importance of due process in such matters. It underscores the role of the judiciary in ensuring that the rights of parties are protected while legal challenges are underway. The final outcome of the case will be keenly watched as it may have implications for similar cases in the future.

Court Name : Calcutta High Court

Parties : DRB Infrastructure Pvt. Ltd vs State of West Bengal and Ors.

Decision Date : 16 June 2023

Judgement ref : WPA 509 of 2023

In the High Court at Calcutta

Circuit Bench at Jalpaiguri

Constitutional Writ Jurisdiction

Appellate Side

WPA 509 of 2023

DRB Infrastructure Pvt. Ltd.

-versus

State of West Bengal and Ors.

Mr. Bharat Raichandani

Mr. Debajit Kundu

… for the petitioner.

Mr. Subir Kumar Saha

Mr. Bikramaditya Ghosh

… for the State.

Counsel for the respective parties are present.

The petitioner has filed present writ application praying for direction for release of the trailers loaded with machines/equipment sent by E- way bill dated 22.12.2022 transported from Arunachal Project site to the project site of Jammu and Kashmir through the State of West Bengal.

The petitioner is a construction company who was entrusted with the sub-contract for earth excavation, embankment/subgrade work and drain work on the four/six lane access controlled expressway at Jammu in the State of Jammu Kashmir. In order to carry out the said work, the petitioner transported its own machinery from Arunachal Pradesh to jammu by two trailers through a third party consignment. On 26.12.2022, the respondent no.3 had intercepted the said trailers. By an order dated 15.02.2023, the

respondent no. 3 has imposed penalty upon the petitioner for a total amout of Rs. 8,13,600/- for violation of the provisions of Section 31, 68 and

Section 129(1) of the WBGST/CGST Act 2017 and Rules 45 and 55 of the WBGST/CGST Rules 2017.

Counsel for the petitioner submits that the petitioner has made representation for release of the trailers as the machinery are used machinery and for the purpose of carrying out the work awarded to

the petitioner as sub-contract, the petitioner was transporting the same from Arunachan Pradesh to Jammu Kashmir through West Bengal but the

authorities have not released the same and have imposed penalty and accordingly, the petitioner has filed the present writ application.

Counsel for the petitioner submits that since the machinery has been seized and lying with the respondent no.3, the petitioner’s work has been hampered and the petitioner is not in a position to carry out the work awarded to the petitioner at Jammu and Kashmir and accordingly, the counsel for the petitioner prays for release of the seized machinery so that the petitioner can take the said machinery for completion and execution of the awarded work.

Per contra, counsel for the State submits that the petitioner has filed this application with respect of release of machinery seized by the respondent no.3 in violation of the provision as mentioned above and if the petitioner is ready and willing to submit bank guarantee with respect of penalty imposed by the respondent no.3 by the order dated 15.02.2023, an order can be passed for release of the said machinery on interim basis till the disposal of the proceeding before the competent authority.

Considered the rival submission of the respective parties. Perused the materials on record and the impugned order.

The petitioner has also challenged the order passed by the respondent no.3 dated 15.02.2023 and as such this Court is of the view that the writ

petition can only be disposed of only after exchange of affidavits and accordingly, the respondents are directed to file affidavit-in-opposition within three weeks; reply thereto, if any, be filed within two weeks thereafter.

In the meantime, the respondent no.3 is directed to release the trailers loaded with machinery and equipment on furnishing of Bank Guarantee equal to the amount as per the order dated 15.02.2023. The Bank Guarantee shall be

valid initially for a period of six months and the same can be extended from time to time. The respondent no.3 is directed to release the said machinery within a week on receipt of the Bank Guarantee from the petitioner.

Let the matter appear before the next Circuit Bench.

(Krishna Rao, J.)