A division bench of the Kerala High Court recently directed the Commercial Tax Officer to release detained goods on payment of 50% of demand as per the new Goods and Services Tax (GST) law.
Justices Antony Dominic and Dama Seshadri Naidu was hearing a writ appeal against the order of the Single Judge wherein the Court asked the department to release the detained goods on payment of 50% of such demand along with execution of a simple bond.
The respondent, an assessee under the Kerala Value Added Tax (KVAT) Act has migrated to the current GST regime. During a consignment of goods, the vehicle of the respondent was intercepted by the department officials. The goods were later detained on ground that there were no nexus between the documents accompanied and the actual goods under transport.
The respondent approached the High Court through a writ petition wherein the Single Judge directed Intelligence Inspector to make a fresh assessment computing the value of the goods and the tax payable under the CGST Act and SGST Ordinance together with penalty. It was also ordered that on payment of 50% of such demand along with execution of a simple bond, the goods shall be released.
Aggrieved by the order, the department preferred an appeal before the division bench.
Upholding the order of the Single Judge, the bench observed that section 129 of the CGST/SGST ordinances provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication. “When the statute itself provides for such a mechanism, a deviation therefrom cannot be ordered. If that be so, the provisional release in the manner as is ordered in the judgment under appeal cannot be sustained.”
“However, taking note of the provisions of Rule 140 (2) obliging a dealer to produce the goods as and when demanded, and considering the inconvenience and prejudice that is likely to be caused on account of the delay, we need hardly emphasise the necessity for an expeditious adjudication even in cases goods are released provisionally. However, in this case, it is unnecessary for us to deal with that issue at greater length as the Government Pleader himself has agreed that the adjudication will be completed, within one week,” the bench added.
Read the Full Text of the Judgment Below
