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2020 (8) TMI 517 - KARNATAKA HIGH COURTSeizure of consignments alongwith vehicle - perishable goods in transit - cancellation of registration of the supplier - Section 67 of the CGST Act - whether the department is entitled to seize a consignment of perishable goods in transit more particularly when it is accompanied by a lawful e-way bill, invoice and when it has paid the applicable IGST? HELD THAT:- Under Section 83 of the CGST Act, during the pendency of any proceedings under Section 67 or 74, the Commissioner in order to secure the interest of the revenue can provisionally attach any property. However, such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the Order. Rule 140 of the CGST Rules provide that the seized goods may be released on a provisional basis upon the execution of a bond for the value of the goods in Form INS-04 and furnishing of a security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable - Under Rule 141 of the CGST Rules, any perishable goods seized shall be released forthwith by an Order in Form GST INS-05 if the taxable person pays an amount equivalent to the market price of such goods or things or the amount of tax, interest and penalty that is or may become payable whichever is lower. Thus, having regard to the scheme of the CGST Act and the rules, whenever perishable goods are seized, it is the duty of the seizing authorities to obtain a bond and or security or require the payment of the market price of the goods or the amount of tax, interest and penalty whichever is lower. This is precisely the reason that whenever such perishable goods are intercepted and detained under Section 129 of the CGST Act, the period for payment of tax and penalty in respect of perishable goods can be reduced to seven days. If the supplier has made outward movement of goods worth ₹ 73,00,00,000-00, then the recipients must have availed the tax credit and this could not have gone unnoticed by the department. This could be attributed to the lackadaisical attitude of the department and the case of the supplier in the instant case should be an eye opener for the State authorities under the Act to ascertain whether the registered establishments are doing business at the registered places and also to take pro active steps for the installation of Radio Frequency Identification devices as this would help the easy tracking of the movement of goods and for verification of e-way bills and the payment of tax etc. Thus, the revenue has to put its house in order and strive to achieve the lofty targets set by the CGST Act by effectively using the tools of audit, inspection, seizure, prosecution, recovery etc. In a proceeding under Section 67 of the CGST Act against the supplier, the respondent was not justified in seizing the perishable goods in transit, moreso when the goods had suffered tax and penalty - the respondent is directed to forthwith release the lorry bearing registration number HR-55-AF-7882 and the goods carried by it which is covered by the E-Way bill 181110112217 - Petition allowed.
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