Assessee Made Payment of Tax and Interest and Furnished BondValidity of Insisting for Bank Guarantee for Provisional Release of GoodsNarendra Kumar

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The Tax Publishers GST--Provisional Release of Goods Assessee Made Payment of Tax and Interest and Furnished Bond--Validity of Insisting for Bank Guarantee for Provisional Release of Goods Narendra Kumar The learned author seeks make an analytical study of the issue as to whether where the assessee has made payment of tax and interest and furnished bond for provisional release of the goods, insisting for further security or bank guarantee is sustainable in the eye of law. The related issue is being discussed in the light of relevant statutory provisions and a recent Gujarat High Court decision in the case of AB Traders v. State of Gujarat 2022 (58) GSTL 522 (Guj-HC). 1. Seizure of goods and provisional release thereof Section 67 of the CGST Act deals with the power of inspection, search and seizure. As per sub-section (2) of section 67, where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things. As per first proviso to sub-section (2) of section 67, where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. According to second proviso to sub-section (2) of section 67, the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act. Sub-section (3) of section 67 provides that the documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice. Sub-section (6) of section 67 provides an option to release the goods seized on provisional basis. According to the above provision, where the goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be. Further, sub-section (7) of section 67 provides that where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Provisional Release of Goods

Assessee Made Payment of Tax and Interest and Furnished Bond--Validity of Insisting for Bank Guarantee for Provisional Release of Goods

Narendra Kumar

The learned author seeks make an analytical study of the issue as to whether where the assessee has made payment of tax and interest and furnished bond for provisional release of the goods, insisting for further security or bank guarantee is sustainable in the eye of law. The related issue is being discussed in the light of relevant statutory provisions and a recent Gujarat High Court decision in the case of AB Traders v. State of Gujarat 2022 (58) GSTL 522 (Guj-HC).

1. Seizure of goods and provisional release thereof

Section 67 of the CGST Act deals with the power of inspection, search and seizure. As per sub-section (2) of section 67, where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things.

As per first proviso to sub-section (2) of section 67, where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

According to second proviso to sub-section (2) of section 67, the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act.

Sub-section (3) of section 67 provides that the documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.

Sub-section (6) of section 67 provides an option to release the goods seized on provisional basis. According to the above provision, where the goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.

Further, sub-section (7) of section 67 provides that where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized.