Goods seized? Three ways to get them released under GST law

Case Name:

M/s. Reliance Industries Ltd. vs. State of U.P.

Misc. Bench No. 31799 of 2017

Key Takeaways:

- Assessees have three options to get seized goods released under GST law.

- The court emphasized the importance of expeditious decision-making by proper officers.

- The judgment clarifies the application of Section 129 of the CGST Act, 2017.

Issue:

Can an assessee get its goods released after they have been seized under Section 129 of the Central Goods and Services Tax Act, 2017?

Facts:

- The revenue authorities seized goods belonging to M/S. Reliance Industries Ltd. on December 5, 2017.

- The seizure was carried out under Section 129 of the U.P. GST Act, 2017, read with Section 7 of the same Act.

- Reliance Industries filed a writ petition in the Allahabad High Court challenging this seizure order.

Arguments:

The petitioners (Reliance Industries) raised contentions on the merits of their tax liability. However, the court noted that these issues would be more appropriately considered in penalty proceedings or assessment proceedings at a later stage.

Key Legal Precedents:

The judgment doesn't mention any specific legal precedents. Instead, it focuses on interpreting Section 129 of the Central Goods and Services Tax Act, 2017.

Judgement:

- The court ruled that the petitioner (Reliance Industries) can get its goods released by using any of the three modes mentioned in Sub-section 1(a) to (c) of Section 129.

- These options include furnishing a security equivalent to the amount payable under Clause (a) or Clause (b) in the prescribed form and manner.

- The court directed the petitioners to approach the proper officer under these provisions.

- The proper officer was instructed to look into the matter and make an appropriate decision in accordance with the law.

- The court ordered that an expeditious decision should be taken by the proper officer within two weeks from the date a certified copy of the order is submitted.

- With these observations, the writ petition was disposed of.

FAQs:

Q1: What are the three modes mentioned in Section 129(1) for getting seized goods released?

A1: The judgment doesn't specify the exact modes. However, Section 129(1) of the CGST Act generally provides options like paying applicable tax and penalty, furnishing security, or paying a redemption fine along with applicable tax.

Q2: Does this judgment apply to all cases of goods seizure under GST?

A2: While this judgment interprets Section 129 of the CGST Act, its application in other cases may depend on the specific circumstances of each case.

Q3: What happens if the proper officer doesn't make a decision within two weeks?

A3: The judgment doesn't specify consequences for non-compliance with the two-week timeframe. In such cases, the assessee might need to approach the court again for further directions.

Q4: Can the assessee challenge the merits of their tax liability during the goods release process?

A4: The court indicated that issues related to tax liability would be more appropriately addressed in subsequent penalty or assessment proceedings, not at the stage of goods release.

Q5: Is this judgment final, or can it be appealed?

A5: The judgment doesn't mention any leave to appeal. However, generally, High Court decisions can be appealed in the Supreme Court if there are substantial questions of law involved.

Heard.

The petitioners have approached this Court against the order of

the seizure dated 05.12.2017 passed by the proper Officer under

Section 129 of the U.P. GST Act, 2017 read with Section 7 of

the same Act.

As regards the contention of the petitioners on merits as to his

liability to tax etc. these are issues which would be considered

either in the penalty proceedings or in the assessment

proceedings at the appropriate stage and any consideration by

this Court at this stage would prejudice the said proceedings.

Moreover, we find from a perusal of Section 129 that the

petitioner can get its goods released by resorting to any of the

three modes mentioned in Sub-section 1(a) to (c) thereof,

meaning thereby, it can also furnish a security equivalent to the

amount payable under Clause (a) or Clause (b) in such form and

manner as may be prescribed including Sub-section 6 of

Section 67 by virtue of Section 2 of Section 129, therefore, it

would be appropriate for the petitioners herein to approach the

proper officer under the said provisions, who shall look into the

matter and take such decision as is appropriate and accordance

with law.

An expeditious decision shall be taken by the proper officer,

say, within a period of two weeks from the date a certified copy

of this order is submitted.

With the aforesaid observations, the writ petition is disposed of.

Order Date :- 6.2.2018

R.K.P.

(Rajesh Singh Chauhan,J.) (Rajan Roy,J.)