Court Orders Release of Seized Goods, Rejects Invalid Seizure Ground

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Case Name:

M/s. Maa Vindhyavasini Tobacco (P) Ltd. Vs State of U.P.

Writ Tax No.870 of 2017

Date: 22nd December 2017

Key Takeaways:

Goods can be seized for discrepancies in quantity, but not solely for transportation after invoice issuance.

Courts may order the release of seized goods upon furnishing security.

Invalid grounds for seizure can lead to the dismissal of penalties.

Issue:

Was the seizure of goods and imposition of penalty justified based on the grounds provided by the authorities?

Facts:

The goods of M/S. MAA VINDHYAVASINI TOBACCO (P.) LTD. were seized by the State of U.P.

Two grounds were given for the seizure:

Discrepancy in the quantity of goods

Goods were transported one week after the issuance of the invoice

The quantity discrepancy was later resolved and accepted by the department.

The petitioner filed for the release of the seized goods.

Arguments:

The judgment doesn't explicitly state the arguments from both sides. However, we can infer:

Petitioner's argument:

The seizure was unjustified as the quantity discrepancy was resolved.

Transporting goods after invoice issuance is not a valid ground for seizure.

State's argument:

The goods were seized due to quantity discrepancy and delayed transportation after invoice issuance.

Key Legal Precedents:

The judgment doesn't mention any specific legal precedents. However, it refers to the principles of seizure, detention, and confiscation under the Goods and Services Tax law.

Judgement:

The court found the second ground for seizure (goods transported one week after invoice issuance) invalid and unacceptable for imposing a penalty.

The court ordered the release of the goods, subject to the petitioner furnishing security equal to the value of the goods and tax payable, in the form of an indemnity bond.

The vehicle along with the goods was to be released in favor of the petitioner forthwith.

The court granted three weeks' time for the respondent to file a counter-affidavit and one week thereafter for the petitioner to file a rejoinder affidavit.

The case was listed for further hearing on 24.01.2018.

FAQs:

Q1: What were the grounds for seizing the goods?

A1: The goods were initially seized due to a discrepancy in quantity and because they were transported one week after the invoice was issued.

Q2: Why did the court reject one of the seizure grounds?

A2: The court found that transporting goods one week after the invoice date is not a valid ground for seizing goods or imposing a penalty.

Q3: What conditions did the court set for releasing the goods?

A3: The court ordered the release of the goods upon the petitioner furnishing security equal to the value of the goods and tax payable, in the form of an indemnity bond.

Q4: Did the court completely resolve the case in this judgment?

A4: No, the court ordered the release of goods but also scheduled further hearings, allowing time for counter-affidavits and rejoinders.

Q5: What's the significance of this judgment for businesses?

A5: This judgment highlights that authorities need valid grounds for seizing goods, and mere delay in transportation after invoice issuance is not a justifiable reason for seizure or penalty.

Heard Sri Shubham Agrawal, learned counsel for the petitioner and Sri C.B. Tripathi, learned Special Counsel for the revenue.

Sri Prem Shankar Prasad, Advocate has filed his appearance slip on behalf of the respondent no.2, which is taken on record.

The goods have been seized on two grounds, one being discrepancy in the quantity. That discrepancy has been resolved and it is accepted to the department that the quantity of goods as disclosed in the documents is the same as found on physical verification. The other ground of seizure on which penalty has been imposed is that the goods, started their journey one week after the date of the invoice. Prima facie that cannot be the ground to seize the goods or to impose penalty.

Sri C.B. Tripathi, learned standing counsel prays for and is granted three weeks' time to file counter affidavit. Petitioner will have one week

thereafter to file rejoinder affidavit.

List on 24.01.2018, showing the name of Sri Prem Shankar Prasad also as counsel for the respondents.

In the meanwhile, subject to the petitioner furnishing security equal to the value of the goods and tax payable, in the form of indemnity bond, the vehicle along with goods shall be released in favour of the petitioner forthwith.

Order Date :- 22.12.2017