The petitioner was selling Areca nuts from Karnataka to customer based in Delhi. The conveyance was intercepted and proceedings under section 129 was initiated on the basis that there was no E-way Bill. However, confiscation order came to be passed under section 130 of the CGST Act, 2017 on the ground that the goods were undervalued and hence, there was evasion of GST. An appeal was filed against this order, which came to be rejected by the appellate authority. Hence, writ petitions came to be filed before the Hon’ble Karnataka High Court in absence of GST Appellate Tribunal. The Hon’ble Single Judge passed interim order directing release of goods on conditions including condition securing the entire amount by way of furnishing security in the form of immovable property equal to the fine amount. Such orders were challenged, in writ appeal, before the Hon’ble Division Bench.
The Hon’ble High Court of Karnataka allows appeals and holds that the conditions imposed are onerous. It modifies the conditions by directing deposit of statutory deposit under section 112 for filing appeal (deposits already made will be adjusted), bank guarantee for tax and penalty amount and personal bond for differential amount of fine. Rejects Revenue’s contention that no such release order could be passed without payment of fine imposed under section 150 which would be contrary to statute on the ground revenue has not challenged the order and the appellant cannot be worse off by filing an appeal. The contention of the petitioner that: (i) proceedings under section 129 and 130 are independent and once 129 is invoked, 130 cannot be resorted to; (ii) section 130 can be resorted to only once value is rejected under section 15 by passing an order under section 73/74 of the Act are kept open for adjudication in writ petition pending before the Single Judge.
M/s Quadri and Company v Commercial Tax Officer & Ors [WA No. 100629 of 2023 (T-RES)]
