Bank guarantee not needed for provisional release of seized goods if tax & penalty already paid: HC

Case Details: AB Traders v. State of Gujarat - [2022] 137 taxmann.com 316 (Gujarat)

Judiciary and Counsel Details

• • Ms. Sonia Gokani and Ms. Nisha M. Thakore, JJ.
  • Uchit N. Sheth for the Petitioner. 
  • Trupesh Kathiriya, Asstt. Govt. Pleader for the Respondent.

Facts of the Case

The petitioner transported goods and vehicle was intercepted by the department. The driver produced the tax invoice as well as the transport receipt. There was no discrepancy found in the quantity as per invoice and the quantity loaded with the conveyance. However, the goods had been detained since e-way bill was not available with the driver. The notice for confiscation was issued. The petitioner made payment of tax, penalty as well as furnished the bond. However, the department did not release the goods or conveyance. It filed petition against the same.

High Court Held

The Honorable High Court observed that the petitioner requested for the provisional release since the tax and penalty had already been paid and bond was furnished. However, the department insisted for furnishing bank guarantee or security for release of goods. Since, the petitioner had already made payment of tax and penalty, the department could not insist on bank guarantee once bond was executed as per provisions. Therefore, the department was directed to release goods and conveyance.

Case Review

• • Western Enterprises v. State of Gujarat [R/Special Civil Application No. 1368 of 2021, dated 4-3-2021] (para 11) followed.

List of Cases Referred to

• • Western Enterprises v. State of Gujarat [R/Special Civil Application No. 1368 of 2021, dated 4-3-2021] (para 2.9).