M/S Skipper Limited vs. Union Of INDIA And 3 Ors

Held

The Court held that the proceedings initiated under Section 129(3) of the UPGST Act, 2017, are deemed to be concluded under Section 129(5) of the Act, as the petitioner had furnished a bank guarantee equivalent to the amount payable and the seized goods and conveyance were released. The Court reasoned that Section 129 of the UPGST Act, 2017, contemplates a comprehensive scheme for the release of goods and conveyances in transit upon payment of applicable tax and penalty or furnishing of equivalent security. Upon such payment or furnishing of security, the proceedings initiated by the notice under Section 129(3) are deemed concluded under Section 129(5). The impugned order dated December 4, 2019, demanding further bank guarantee was therefore considered infructuous. The Court directed the Revenue Authorities to adjudicate the case on merits expeditiously, preferably within three months, and stated that the invocation of the bank guarantee would be subject to the result of this adjudication. No issue was expressly left undecided.

Facts

The petitioner, M/s Skipper Limited, challenged an order dated December 4, 2019, issued by the Assistant Commissioner (Incharge) Commercial Tax, Mobile Squad Mughalsarai Unit, Chandauli. This order required the petitioner to furnish a bank guarantee equivalent to the amount of liability determined under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017, at the time of seizure of goods and conveyance in transit. The order was purportedly passed in compliance with a Supreme Court judgment in State of Uttar Pradesh and others Vs. M/s Kay Pan Fragrance Pvt. Ltd. The petitioner contended that they had already furnished a bank guarantee equivalent to the payable amount under Section 129(1)(c) of the UPGST Act, 2017, prior to the impugned order, and that the seized goods and vehicle had been released on the strength of this security. The State Revenue admitted that the petitioner had furnished the bank guarantee.

Key Issues

1. Whether the proceedings initiated under Section 129(3) of the UPGST Act, 2017, are deemed concluded under Section 129(5) of the UPGST Act, 2017, given that the petitioner furnished a security equivalent to the amount payable under Section 129(1)(c) of the UPGST Act, 2017, and the goods and conveyance were released. Petitioner's Argument: The petitioner argued that upon furnishing the security equivalent to the amount payable and the subsequent release of goods and conveyance, the proceedings under Section 129(3) are concluded as per Section 129(5) of the UPGST Act, 2017. They relied on the scheme of Section 129 which aims for expeditious release of goods and conclusion of proceedings upon compliance. Revenue's Argument: The Revenue did not explicitly argue against the conclusion of proceedings but rather admitted that the bank guarantee was furnished and the goods were released. Their action, as reflected in the impugned order, was to demand further security in compliance with the Supreme Court's direction, implying a continuation of proceedings.