The Additional Director General Of The Directorate General Of GST Intelligence Dggi vs. Ms Sarvadeva Vanijya PVT LTD And Ors
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This matter concerns an application for modification of an interim order passed by the Gauhati High Court in a writ petition. The original interim order, dated January 22, 2026, directed the release of a consignment of areca nuts and vehicles upon furnishing a bank guarantee to cover the alleged short-paid tax of Rs. 4,52,076/- (CGST and SGST combined). The Directorate General of GST Intelligence (DGGI), the petitioner in this application, sought modification, arguing that the original order failed to account for the penalty component, which, along with the tax, amounted to Rs. 99,45,656/- as per a December 22, 2025 communication. The DGGI contended that the bank guarantee should be increased to cover both tax and penalty to balance equities. The writ petitioner, MS Sarvadeva Vanijya Pvt Ltd, argued that the penalty was considered when the original interim order was passed and that the primary purpose was to secure the tax demand, especially given the perishable nature of the goods.
Held
The Court held that no case for modification or alteration of the interim order dated January 22, 2026, was made out. The Court reasoned that while Annexure 10 to the writ petition did contain the penalty amount, the primary purpose of the interim order was to secure the amount of tax short-paid, which was Rs. 4,52,076/-. The Court was of the opinion that justice had been considered and that the interim order was passed on being prima facie satisfied, especially given the perishable nature of the goods. The Court clarified that if the writ petition ultimately fails, the Department would retain all rights to enforce the penalty aspect. The Court did, however, modify the interim order to the extent that the bank guarantee, as directed, should be furnished in the name of respondent no. 3 (Senior Intelligence Officer, DGGI) instead of respondent no. 2 (Assistant Director General, DGGI).
Key Issues
1. Whether the interim order dated January 22, 2026, passed in WP(C)/318/2026, which directed the release of goods upon furnishing a bank guarantee for the tax short-paid amount of Rs. 4,52,076/-, requires modification to include the penalty component of Rs. 99,45,656/-. This issue turns on the interpretation of the Court's consideration of all relevant amounts at the interim stage, particularly in light of the DGGI's submission that the penalty was not adequately addressed. Petitioner's Arguments (DGGI): The DGGI argued that the original interim order overlooked the penalty component, which was clearly indicated in Annexure 10 of the writ petition. They contended that to secure justice and balance equities, the bank guarantee amount should be increased to cover the total demand of Rs. 99,45,656/-, comprising both tax and penalty. They are not opposed to the release of perishable goods in principle. Respondent's Arguments (Writ Petitioner): The writ petitioner argued that the penalty component was indeed brought to the Court's attention when the interim order was passed on January 22, 2026, as evidenced by Annexure 10. They maintained that the interim order was passed to secure the tax involved and that the Court, being prima facie satisfied and considering the perishable nature of the goods, had made an appropriate direction. They also noted that the interim order had not been complied with.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER 12.03.2026 Heard Shri SC Keyal, learned Senior Standing Counsel, DGGI for the applicant. Also heard Dr. A. Saraf, learned Senior Counsel assisted by Shri A. Kaushik and Shri B. Sarma, learned counsel for the opposite party / writ petitioner.
By the instant application, a prayer has been made for modification / alteration of the order dated 22.01.2026 passed in the connected writ petition being WP(C)/318/2026. By the aforesaid order dated 22.01.2026, this Court had passed an interim direction providing that subject to furnishing of adequate bank guarantee before the respondent no. 2 to cover the demand of tax short paid namely, Rs.2,26,038/- respectively for CGST and SGST totaling to Rs.4,52,076/- by the petitioner, the consignment of the areca nuts along with the vehicle Nos. WE65EB0086 and AS23BC9796 be released forthwith. The primary ground of filing this application is that while passing such interim order, the Court had taken into consideration only the amount of tax short paid and not the penalty involved.
By drawing the attention of this Court to the order dated 22.12.2025
Page No.# 3/4 issued by the Assistant Director, Shri Keyal, learned Standing Counsel has submitted that the same would indicate that there is a component of penalty and the total amount would be Rs.99,45,656/-. He accordingly submits that to balance the equities and secure the end of justice, the amount of the bank guarantee should be increased proportionately. He has submitted that in principle, he is not opposed to the aspect of releasing of the goods which are admittedly perishable in nature.
Dr. Saraf, learned Senior Counsel for the opposite party / writ petitioner has however submitted that while passing the interim direction on 22.01.2026, this Court was apprised of the penalty component which clearly appears from the communication dated 22.12.2025 (Annexure 10 of the writ petition). After such consideration, to secure the amount of tax involved, the present interim order has been passed directing furnishing of a bank guarantee of an amount equivalent to the tax allegedly short paid. He has also informed that in the pretext of filing the IA, the interim order which was passed inter-parte has not been complied with till date.
Upon hearing the learned counsel for the parties, this Court has observed that while passing the interim order dated 22.01.2026, this Court had taken into consideration the amount of tax short paid which is Rs.4,52,076/-. Though, this Court has also noted that Annexure 10 to the writ petition which contains the calculation in a tabular form also constitutes the penalty amount, in the considered opinion of this Court, the primary purpose is to secure the amount of tax short paid as alleged by the Department. Accordingly, this Court is of the opinion that the interest of justice has been taken into consideration and on being prima facie satisfied, the interim order has been passed, more so, when the goods involved are admittedly of perishable nature. This Court is accordingly
Page No.# 4/4 of the opinion that no case for modification / alteration of the interim order is made out.
It is needless to state that that in the event the petitioner fails in the writ petition, the Department will have all the rights to enforce the penalty aspect.
At this stage, Shri Keyal, learned Senior Standing Counsel has submitted that the bank guarantee should be submitted before the respondent no. 3 – Additional Director General of the DGGI. The interim order dated 22.01.2026 is accordingly modified to the extent of the bank guarantee, as directed vide the order dated 22.01.2026 be furnished in the name of the respondent no. 3 instead of the respondent no. 2. 8. I.A. accordingly stands disposed of. JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.