M/S Tci Freight vs. Assistant Commissioner Sector 4 And Another

Held

The Court held that the petitioner was entitled to the provisional release of the goods and vehicle. The reasoning was based on the admission by the Standing Counsel for the respondents that the rules permit such provisional release upon furnishing a bond in Form GST INS-04 and security in the form of a bank guarantee, as per Rule 140(1) of the UPGST Rules read with Section 67(6) of the UPGST Act, 2017. The Court found no dispute regarding the petitioner's entitlement to this relief under the prevailing rules. The ratio decidendi is that if the statutory rules provide for provisional release of goods and vehicles upon furnishing security, and the conditions for such release are met, the authorities cannot arbitrarily refuse it, especially when the revenue's interest can be secured. The Court issued a writ of mandamus directing the respondent no.1 to release the goods and vehicle no. RJ11GB6185 provisionally upon the petitioner furnishing the required bond and bank guarantee. No issue was expressly left undecided.

Facts

The petitioner, M/s TCI Freight, a transporter, was carrying goods for M/s Havells India Limited to Shree Balaji Electric Company. The Eway Bill was generated on 21.10.2023 with Eway Bill No. 741377409037. However, the vehicle number was mistakenly mentioned as HR55AP5675 in the challans, while the actual vehicle was RJ11GB6185. This discrepancy led to the interception of the vehicle. A penalty of Rs. 49,10,520/- was imposed, and an order dated 03.11.2023 demanded this sum for the release of the goods and vehicle. The petitioner contended that the mistake was not with the intent to evade tax and that no detention order under Section 129(1) was issued. The petitioner sought provisional release of the goods and vehicle by furnishing a bond and bank guarantee as per Rule 140(1) of the UPGST Rules read with Section 67(6) of the UPGST Act, 2017, which was refused.

Key Issues

1. Whether the petitioner is entitled to the provisional release of goods and vehicle no. RJ11GB6185 upon furnishing a bond in form GST INS-04 and security in the form of a bank guarantee as per Rule 140(1) of the UPGST Rules read with Section 67(6) of the UPGST Act, 2017, despite the alleged discrepancy in the vehicle number mentioned in the challans versus the Eway Bill. Petitioner's arguments: The petitioner argued that the mention of an incorrect vehicle number in the challans was a bona fide mistake, not intended for tax evasion. They further contended that no detention order under Section 129(1) had been issued. They relied on the provisions of Rule 140(1) of the UPGST Rules and Section 67(6) of the UPGST Act, 2017, which permit provisional release upon furnishing security. Respondent's arguments: The Standing Counsel for the respondents admitted that the rules allow for provisional release of goods and vehicle upon furnishing a bank guarantee and bond in the specified forms, as prayed by the petitioner.