GST and Penalty already Paid: Gujarat High Court orders Immediate Release of Goods [Read Order]

A division bench of the Gujarat High Court has ordered the GST department to release the goods considering the fact that the amount of tax and penalty has been already remitted with the department.

The writ-applicant is a Proprietor of a Proprietory concern running in the name of ‘M/s. Sridev Traders’ at Rajkot. The Proprietory Concern is engaged in the business of trading of Areca Nuts. The writ-applicant wanted to purchase Areca Nuts and placed an order for purchase of 24500 kg. of Areca Nuts worth Rs.63,70,000/- with the supplier. The writ-applicant, along with the Supplier, approached the Court for the release of the goods and the conveyance.

The division bench comprising Justice J B Pardiwala and Justice Nisha M Thakore observed that the requisite amount towards tax and penalty aggregating to Rs.9,55,840/- has already been deposited by the supplier i.e.M/s. Izaan Trading; the writ-applicant of the Special Civil Application No.3640 of 2022 with the authority.

“It appears that the supplier has paid tax twice; first in point of time on 19.11.2021 and second in point of time 18.12.2021 alongwith the penalty. If the amount towards the tax and penalty has already been deposited, there should not any problem in ordering release of the goods and the conveyance. Even otherwise the goods are Areca Nuts. The goods could be said to be perishable in nature,” the bench said.

Directing the GST department to release the goods as well as the conveyance at the earliest, the bench observed that if the Department wants to proceed further with the inquiry, it may do so in accordance with law.

“We are not inclined to quash the detention order as on date. We are saying so because tomorrow the department may deem fit to issue notice under Section-130 of the Act in the Form GST-Mov10. If such notice is issued, it shall be open for the writ-applicant to question the same in accordance with law before the appropriate forum,” the bench added.

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