Hari Govind Texfab (INDIA) Privet Limited vs. State Of U.P. And 3 Others

Held

The Court held that the continued seizure of goods and vehicle during the pendency of an appeal, after the petitioner has deposited 10% of the tax and penalty, leads to serious civil consequences and frustrates the purpose of the partial deposit. The Court directed the petitioner to deposit the balance amount of tax under CGST and SGST. Additionally, the petitioner was required to furnish security, other than cash and bank guarantee, for the remaining amount of the penalty, along with an indemnity bond of the same amount. Upon compliance with these directions, the goods and vehicle of the petitioner were to be released forthwith. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Hari Govind Texfab (India) Private Limited, is a registered dealer whose goods and vehicle were detained on October 10, 2018. An order of assessment of tax and penalty was subsequently passed on October 19, 2018. The tax imposed was CGST of Rs. 10,480.50 and SGST of Rs. 10,480.50, along with a penalty of Rs. 209,610/- for CGST and a similar amount for SGST. The petitioner filed an appeal under Section 107 of the Act, depositing 10% of the tax and penalty amounts. While the recovery of the balance amount was stayed upon this deposit, the goods and vehicle remained seized. The petitioner argued that the appeal process could take time, and continued seizure of goods and vehicle would lead to serious civil consequences, frustrating the purpose of the partial deposit.

Key Issues

1. Whether the continued seizure of goods and vehicle is justified during the pendency of an appeal, after the petitioner has deposited 10% of the tax and penalty amounts as per Section 107 of the Act. Petitioner's arguments: The petitioner contended that the Act itself provides for the decision of appeals within a year, and therefore, there is no justification for keeping the goods and vehicle seized during this period. They argued that the continued seizure visits the petitioner with serious civil consequences and frustrates the purpose of depositing a part of the amount as a condition precedent for filing the appeal. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (State of U.P. and others).