Sohan Lal Commodity Management PVT. LTD. And Another vs. State Of U.P. Through Its Principal Secreatry (Tax And Institutional Finance) And 6 Others

Held

The Court, considering the facts and circumstances and without expressing an opinion on the merits, disposed of the writ petition. It directed the petitioners to make an appropriate application or representation before the concerned authority under the relevant provisions of the Act, 2017, ventilating their grievances. This application should include a certified copy of the High Court's order and a copy of the writ petition with its annexures. The concerned authority was directed to consider and decide the application by a reasoned and speaking order, after affording an opportunity of personal hearing to the petitioners, in accordance with law, expeditiously, preferably within two weeks from the date of receipt of the application. The Court acknowledged the Supreme Court's directive that authorities should process claims for release of seized goods strictly as per Section 67 of the Act and relevant rules, including payment of taxes, interest, and penalty, or furnishing of bond and security.

Facts

The petitioners, Sohan Lal Commodity Management Pvt. Ltd. and another, filed a writ petition challenging search and seizure operations conducted at their warehouses in Chandausi on September 13, 2019, and in Barabanki on September 13, 2019, and February 28, 2020. They sought to quash these proceedings, transfer adjudication to an independent officer, prevent coercive action, and secure the release of seized documents, assets, and materials. During arguments, the petitioners confined their prayer to the release of seized items. The State relied on a Supreme Court judgment in "The State of Uttar Pradesh & Others Versus M/S Kay Pan Fragrance Pvt. Ltd" concerning the release of seized goods.

Key Issues

1. Whether the petitioners are entitled to the release of seized goods, specifically "Mentha Oil", in light of Section 67 of the Central Goods and Services Tax Act, 2017, and relevant rules? (Question of law) The petitioners argued that "Mentha Oil" is perishable and the concerned authority had not yet exercised powers under Section 67 for its release. They contended that the goods should be released. The revenue, represented by the State, argued that "Mentha Oil" is not perishable and is not included in the schedule of perishable goods notified by the Government of India. They also pointed to the Supreme Court's decision in "M/S Kay Pan Fragrance Pvt. Ltd.", which emphasized recourse to the statutory mechanism for release of seized goods, including furnishing a bond and security or payment of applicable taxes, interest, and penalty, as per Section 67(6) of the Act.