Allahabad High Court allows Release of Detained Goods by Seller since Sale Transaction has not attained Finality [Read Judgment]

A two-judge bench of the Allahabad High Court has held that a selling dealer can release the goods provisions of Section 129 (1) (a) of the Central Goods and Services Tax Act since the sale transaction has not attained finality.

The petitioner is the selling dealer of the goods. The goods were being transported from Delhi to Kanpur in 30 builties. Only on account of an improper invoice in respect of some of the builites, the goods have been seized and directed to be released on furnishing security and indemnity bond as provided under Section 129 (1) (b) of the U.P. Goods and Service Tax Act, 2017.

Before the High Court, the petitioners contended that they are, admittedly the owner of the goods and therefore for the purposes of release, deposit/security and indemnity bond in accordance with the provisions of Section 129 (1) (a) of the Act alone could have been demanded.

A bench comprising Justices Pankaj Mithal and Pankaj Bhatia held that “Since the petitioner is the selling dealer and the sale transaction has not attained finality, he continues to be the owner of the goods and is, therefore, entitle for the release the same in accordance with the provisions of Section 129 (1) (a) of the Act. Sri Tripathi submits that a penalty order has already been passed. The penalty order has nothing to do with the order of the release and it can be challenged in the appropriate forum independently. In view of the aforesaid facts and circumstances, we dispose of the writ petition with the direction to the petitioner to deposit the tax & penalty and to furnish security & indemnity bond in accordance with the provisions of Section 129 (1) (a) of the Act and on deposit of the amount as aforesaid or furnishing security and indemnity bond as may be required, the goods and vehicle of the petitioner shall be immediately released.”