Gujarat HC directs Colgate Palmolive to Deposit entire Tax Amount & 10% of Penalty for Releasing Detained Goods with Truck [Read Order]

The Gujarat High Court directed Colgate Palmolive to deposit the entire tax and 10% of the amount of penalty for now with the department, by way of a bank guarantee, initially for the period of 90 days or till the pendency of Petition, whichever is later.

The company, Colgate Palmolive India Ltd. having its Principal Place of Business at Vadodara which is the warehouse used for storage for finished goods and having its manufacturing unit at Sanand, Ahmedabad.

The petitioner has averred that the petitioner placed an order to its unit located at Goa for the supply of dental cream flavor which is one of the basic raw materials for manufacturing of oral or dental paste and the same had been issued by the Goa Unit. The Goa Unit had issued the E-way bill incorporating all the details as required in terms of provisions of E-way Rules, however, the address of the place of the delivery in the E-way bill was inadvertently mentioned as Vadodara Warehouse unit instead of factory address of Ahmedabad of the petitioner.

Consequently, the truck carrying goods mentioned in the invoice issued by the Goa Unit was intercepted for verification on the Ahmedabad Express Highway and because of this mismatch of the place of delivery in the invoice and E- waybill, the goods have been detained and the show-cause notice has been issued.

The petitioner challenged the exercise of the powers under Section 129 of the GST Act and contended that it is permissible in place of major discrepancy and not when there is a minor mismatch on a human technical error in both the invoices as well as E-way bill.

The bench consisting of Justice Sonia Gokani and Justice N.V. Anjaria while considering the issue of closure of the business in the pandemic for a long time, directed Colgate Palmolive to deposit the entire tax and 10% of the amount of penalty for now with the department, by way of a bank guarantee, initially for the period of 90 days or till the pendency of Petition, whichever is later.

“On deposit of the total amount of tax and furnishing of the bank guarantee with the department within three days as directed, the release of the truck shall be made within 48 hours, with the goods subject to the furnishing of proof of such amount,” the court directed.