Corp Mediteche Private Limited vs. State Of U.P. And Another

Held

The Court held that proceedings under Section 129 of the GST Act are summary in nature, primarily aimed at protecting the interest of the revenue. Deposits made under Section 129 are always subject to the final adjudication of tax liability under the appropriate provisions of the GST Act. The Court noted that upon deposit of the security amount, all proceedings in respect of the notice under Section 129(3) shall be deemed concluded, as per Section 129(5). Furthermore, the findings in the impugned orders shall not influence any subsequent assessment proceedings under Section 73 and 74 of the GST Act or other relevant provisions. The petitioner was directed to deposit the enhanced security within one month, after which the authority would proceed with the assessment of tax liability/penalty. The security deposit would remain subject to the outcome of the adjudication.

Facts

The petitioner, Corp Mediteche Private Limited, is the owner of goods that were detained or seized. The petitioner has agreed to deposit security equivalent to the amount payable under Section 129(1)(a) of the Central Goods and Services Tax Act, 2017, as determined by the appellate authority. The goods have already been released. The petitioner undertakes to deposit the enhanced security within one month from the date of the order. The revenue will then initiate appropriate proceedings for assessment of tax liability and penalty. The security deposit will be subject to the outcome of these adjudication proceedings.

Key Issues

1. Whether the proceedings under Section 129 of the CGST Act, 2017, are summary in nature and intended solely to protect the interest of the revenue, pending final adjudication of tax liability? Petitioner's contention: The petitioner, through its counsel, fairly submitted that it is willing to deposit security equivalent to the amount payable under Section 129(1)(a) of the CGST Act, 2017, as determined by the appellate authority. This implies an acceptance of the summary nature of Section 129 proceedings and a willingness to comply with the revenue's protective measures. Revenue's contention: The judgment does not explicitly record any specific arguments made by the revenue. However, the court's observations indicate that the revenue's interest is to be protected during transit, and that deposits under Section 129 are subject to final adjudication.