Relief to Asian Paints: Madras HC orders GST Dept to release Seized Goods upon receipt of Bank Guarantee [Read Order]

In a relief to Asian Paints Limited, a leading brand and manufacturer in paints, the Madras High Court has directed the GST department to accept a bank guarantee and release the goods under the provisions of the Central GST Act, 2017.

The petitioner imported Titanium Dioxide Rutile bearing TN 07 AV 7881 from M/s Tronox Pigments Private Limited, Australia for their manufacturing plant at Sriperumbudur. While that being so, the goods were inspected by the second respondent and the petitioner was issued with the Order of Detention in Form GST MOV-06 dated 21.03.2022 along with the Penalty Notice under Section 129(3) of the CGST Act, 2017 and TNGST Act, 2017 by the first respondent.

The petitioner requested before the High Court to direct the department to accept the bank guarantee equivalent to the disputed penalty amount of Rs.25,86,662/- in accordance with the provision of Section 129(1)(c) of the CGST Act, 2017 and provisionally release the goods.

Allowing the petition, Justice Dhandapani observed that “In view of the fair submission made by the learned Additional Government Pleader, this Court permits the petitioner to obtain and annex the bank guarantee within a period of one week from the date of receipt of a copy of this order along with the application/representation. If such bank guarantee and application is made, the respondents are directed to release the detained goods to the petitioner within a period of one week thereafter.”

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