M/S. Sri Bhavani Traders Martur vs. The Deputy Commissioner (St)

Held

The Court directed the respondent No.1 to release the seized granite along with the vehicle to the petitioner. This release is made subject to the outcome of the ongoing confiscation proceedings. The Court's decision was influenced by its prior order in W.P.No.42762 of 2017 and batch, which allowed for the release of seized goods and vehicles upon payment of the demanded tax, while making the liability for penalty tax contingent on the final decision of the confiscation proceedings. The writ petition was disposed of in light of these directions. The issue of penalty tax liability was not definitively decided but was made subject to the confiscation proceedings.

Facts

The petitioner, M/s. Sri Bhavani Traders, assails the seizure and detention of granite and a goods vehicle (KA 56 2264) by the Deputy Commissioner (ST), Enforcement, on December 6, 2017. The petitioner's counsel stated that GST of Rs. 54,000/- was recovered on December 7, 2017, evidenced by a challan. The respondents admitted the collection of GST but noted that a confiscation notice was issued on December 10, 2017, and proceedings would be concluded after affording the petitioner a hearing. The respondents also conceded that in a similar case (W.P.No.42762 of 2017), the Court had directed the release of seized goods and vehicles upon payment of demanded tax, with the liability for penalty tax subject to the outcome of confiscation proceedings.

Key Issues

1. Whether the seized granite and vehicle should be released to the petitioner, considering the payment of GST and the pending confiscation proceedings? Petitioner's Contention: The petitioner argued for the release of the seized goods and vehicle, highlighting the payment of GST and implicitly relying on the principle that seized items should be released once the tax demand is met, pending further adjudication. The petitioner's counsel referred to the challan as proof of payment. Revenue's Contention: The revenue admitted the collection of GST but pointed to the issuance of a confiscation notice on December 10, 2017. They argued that the confiscation proceedings would be concluded after providing the petitioner an opportunity to be heard. The revenue conceded that in a similar case, the Court had directed release upon payment of demanded tax, with the penalty tax liability being subject to the confiscation proceedings.