Challenge of Legality of Seizure: Calcutta HC Allows Release of Seized Machinery on Bank Guarantee [Read Order]

The Calcutta High Court allowed the release of seized machinery on bank guarantee as the petitioner, DRB Infrastructure Pvt. Ltd, has challenged the legality of the seizure.

The petitioner has filed present writ application praying for direction for release of the trailers loaded with machines/equipment sent by Eway bill 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. By an order, the respondent, imposed penalty upon the petitioner for a total amount 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.

The Counsel for the petitioner submitted 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 Arunachal 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 further submitted that since the machinery has been seized and lying with the respondent, 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 prayed for release of the seized machinery so that the petitioner can take the said machinery for completion and execution of the awarded work.

Counsel for the State submitted 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 by the order, an order can be passed for release of the said machinery on interim basis till the disposal of the proceeding before the competent authority.

A Single Judge Bench of Justice Krishna Rao, observed that “the 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 is directed to release the trailers loaded with machinery and equipment on furnishing of Bank Guarantee equal to the amount as per the order. The Bank Guarantee shall be valid initially for a period of six months and the same can be extended from time to time” the Court concluded.

To Read the full text of the Order CLICK HERE

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