Court directs petitioner to appeal, releases detained goods without security

Case Name:

M/s. Air Transport Corporation (Assam) (P.) Ltd. Vs. State of U.P. & 3 Others

Writ Tax No. 829 of 2017

Key Takeaways:

- The court emphasized the importance of using statutory remedies before approaching the high court.

- An appellate authority for GST matters had been recently constituted by the state.

- The court allowed for the immediate release of the detained vehicle without security.

Issue:

Should the High Court quash the seizure order under section 129(3) of the CGST Act, 2017, or should the petitioner be directed to use the available statutory remedy?

Facts:

- The petitioner filed a writ petition seeking to quash a notice dated 22.11.2017 and an order dated 30.11.2017 passed under section 129(3) of the UPGST Act.

- The respondent had directed the petitioner to deposit a penalty exceeding 50% of the value of goods, which the petitioner claimed was contrary to section 129(1)(b) of the Act.

- The petitioner also sought the release of goods covered under the seizure memo dated 22.11.2017 on furnishing security for applicable tax and additional penalty.

- An appellate authority had been constituted by the State on 24th November 2017

Arguments:

The petitioner argued:

- The penalty demanded was excessive and contrary to the provisions of the Act.

- They should be allowed to furnish security for the applicable tax and additional penalty to release the goods.

The respondent (state) argued:

- An appellate authority had been constituted to hear such matters.

- The petitioner should use the statutory remedy available before approaching the High Court.

Key Legal Precedents:

The judgment doesn't explicitly mention any legal precedents. However, it refers to:

- Section 129(3) of the UPGST Act

- Section 129(1)(b) of the UPGST Act

- Section 107 of the U.P. Goods and Service Tax Act, 2017

- Rule 109 A of the GST Rules

Judgement:

- The court disposed of the writ petition, directing the petitioner to file an appeal against the order dated 30.11.2017 within one week.

- If filed, the appeal should be heard and decided by the appellate authority within one month.

- The court ordered the immediate release of the detained vehicle (Truck bearing Registration No.U.P. 21 BN 5211) without demanding any security from the petitioner.

FAQs:

Q1: Why didn't the court quash the seizure order directly?

A1: The court emphasized the importance of using available statutory remedies before approaching the High Court.

Q2: What is the significance of the appellate authority being recently constituted?

A2: It provides a proper channel for the petitioner to appeal the order, making it unnecessary for the High Court to intervene directly.

Q3: Why was the vehicle released without security?

A3: The court likely considered it a balance between the interests of the petitioner and the tax authorities, ensuring the petitioner wasn't unduly burdened while the appeal was pending.

Q4: What does this judgment mean for similar cases?

A4: It suggests that courts may prefer parties to exhaust statutory remedies before filing writ petitions in GST-related matters.

Q5: How long does the petitioner have to file the appeal?

A5: The court directed the petitioner to file the appeal within one week from the date of the order.

Heard Sri Suyash Agarwal, learned Counsel for the petitioner and Sri Manish Goyal, learned Additional Advocate General assisted by Sri C.B. Tripathi, learned Standing Counsel for the State.

This writ petition has been filed by the petitioner seeking a writ of certiorari quashing the notice dated 22.11.2017 issued u/s 129(3) of UPGST Act as well as order dated 30.11.2017 passed u/s 129 (3) of the Act by which the respondent no.4 has directed the petitioner to deposit the penalty in excess of 50% of value of goods contrary to section 129 (1) (b) of the Act.

There is a second prayer also seeking a writ of mandamus to release the goods covered under seizure memo dated 22.11.2017 on the furnishing security for 'applicable tax' as well as additional penalty @ 50% of value of goods as reduced by tax paid thereon as per Section 129 (1) (b) of UPGST Act 2017 and vehicle forthwith.

Against the order dated 30.11.2017 the petitioner has an statutory efficacious alternative remedy of filing an appealunder Section 107 of the U.P. Goods and Service Tax Act, 2017 read with Rule 109 A of the Rules. In the above regard, Sri Manish Goyal has made a statement that the appellate

authority has been constituted by the State on 24th of November, 2017.

In view of the above, the instant writ petition is disposed of with the direction that in case, the petitioner files an appeal against the order dated 30.11.2017 within the next one week from today, the same shall be heard and decided in accordance with law by the appellate authority within a period of one month therefrom.

However, the vehicle being Truck bearing Registration No.U.P. 21 BN 5211 on which the goods were found loaded may be released forthwith without demanding any security from the petitioner.

With the above observation the writ petition is disposed of. No costs.

Order Date : 5.1.2018