Proper officer can't invoke the bank guarantee till assessee exhausted statutory remedy

Where Competent Authority had detained goods of assessee under transport and demanded tax as well as penalty and assessee furnished bank guarantee for tax and penalty imposed and had goods released, Competent Authority was restrained from invoking bank guarantee till assessee exhausted statutory remedy


HIGH COURT OF KERALA
Safa Mill Stores
v.
Assistant State Tax Officer, Karukutty
DAMA SESHADRI NAIDU, J.
W.P. (C) NO. 29390 OF 2018
SEPTEMBER  6, 2018

Aji V. Dev for the Petitioner. GP. DR. Thushara James for the Respondent.

JUDGMENT

1. The petitioner, a partnership firm, transported certain goods ostensibly from Bombay to Perumbavoor. But when the petitioner tried to unload the goods at Malamury, Perumbavoor, the authorities checked the documents carried along with the goods and found that they did not correctly reflect the destination point. Suspecting tax evasion, the authorities detained the goods and demanded penalty as well as tax. Aggrieved, the petitioner filed WPC No.10256 of 2018 for the release of goods and for the expeditious completion of adjudication.

2. In terms of the judgment in WPC No.10256/2018, the petitioner furnished bank guarantee for the tax and penalty imposed, and had the goods released.

3. Later, the primary authority completed the adjudication and issued the Ext.P5 order, against which the petitioner intends to file a statutory appeal-within limitation. But he apprehends that the authorities, in the meanwhile, may encash the bank guarantee.

4. The learned Government Pleader, on the other hand, submits that the appellate authority has already been constituted under Section 107(1) of the CGST/SGST Act; the petitioner may file the statutory appeal in time.

Therefore, I restrain the authorities from invoking the bank guarantee under Ext.P5 till the petitioner exhausts the statutory remedy or till the appeal gets barred by limitation.

With these observations, I dispose of this writ petition.


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