M/S Pandurang Trading Co. vs. State Of Rajasthan

Held

The Court held that petitioners have an adequate remedy of challenging the order passed by the Authority before the Appellate Authority, which will decide the validity of the order. The Court did not comment on the merits of the case. However, considering the circumstances and the petitioners' willingness to furnish a bank guarantee, the Court permitted the petitioners to furnish a bank guarantee to the respondents. Upon furnishing the bank guarantee, the respondents were directed to release the goods and vehicle. It was clarified that the bank guarantee would not be encashed by the respondents until the decision of the Appellate Authority. Furthermore, the Court held that the respondents should not take any action under Section 130 of the Act of 2017 until the disposal of the appeal, as the petitioners have been permitted to provide a bank guarantee. The issue of the legality of the penalty and seizure was implicitly left to be decided by the Appellate Authority.

Facts

The petitioners, M/s Pandurang Trading Co. and M/s Madukar Logistic, along with a lorry owner, filed writ petitions challenging penalty orders and the seizure of their vehicles and goods by the State Tax Officer, Bhiwadi. The penalty was imposed under Section 129(1)(b) of the Rajasthan State Goods and Services Tax Act, 2017. The petitioners argued that the orders were illegal and sought the release of their seized vehicles and goods. The respondents contended that a writ petition was not the appropriate remedy, as the petitioners had an alternative remedy of appeal before the Appellate Authority. The petitioners expressed concern that the Appellate Authority's decision might become illusory if confiscation proceedings under Section 130 were initiated before the appeal was decided.

Key Issues

1. Whether the writ petitions are maintainable when an alternative remedy of appeal is available under Section 107 of the Rajasthan State Goods and Services Tax Act, 2017? 2. Whether the penalty imposed under Section 129(1)(b) of the Act of 2017 and the seizure of goods and vehicle are illegal? 3. Whether the Court should exercise its power to direct the release of seized goods and vehicles, considering the pendency of appeal and the apprehension of confiscation proceedings? Petitioner's arguments: The penalty order and seizure were illegal. The Apex Court's interim order in M/s. Gati Kintetsu Express Pvt. Ltd. Vs. Commissioner Commercial Tax of Madhya Pradesh & Ors. supported the release of seized vehicles when tax was paid. Other High Courts have also taken a similar view. The petitioners are prepared to avail the remedy of appeal but seek the release of goods and vehicles, fearing that confiscation proceedings under Section 130 would render the appeal illusory. Respondent's arguments: The writ petition is not an appropriate remedy. The grievances can be agitated before the Appellate Authority. The petitioners have not disclosed that an appeal has already been filed, and they are required to avail the remedy of appeal. If the Court is inclined to release the goods and vehicle, appropriate conditions, such as furnishing adequate bank guarantee, should be imposed, and the appeal should be decided as per law.