There is a fine distinction between the bond and bank guarantee. The difference between a Bank Guarantee and a Bond is that to obtain a Bank Guarantee, there is a requirement of collateral to satisfy the bank, while Bonds do not need collateral to act as a surety. We direct the respondent to release the goods.
Section 129 and 130 of the CGST Act, 2017— Goods in Transit —– The applicant prayed for clarifying that the “bond” as mentioned in order dated 8.2.2021 is not required to be accompanied by bank guarantee/security and that the goods/vehicle are required to be released on the basis of challan and bond. The court in its order dated 08.02.2021 has held that for the balance amount towards fine of Rs. 52 Lakh, the writ applicant shall execute a bond to the satisfaction of the respondent No.2 with an undertaking that ultimately, if the goods are held liable to be confiscated, he shall make good the entire payment towards fine in lieu of confiscation. The court observed that the respondent No.2 being an officer of the GST Department has no idea as to what is a “bond” and what is a “bank guarantee”. The order in the main matter is dated 08.02.2021 and almost one month has passed, but the respondent No.2 has not given effect to order only because of his misconception of law. Bond means bond in accordance with law and not the bank guarantee in its true sense. The difference between a Bank Guarantee and a Bond is that to obtain a Bank Guarantee, there is a requirement of collateral to satisfy the bank, while Bonds do not need collateral to act as a surety.
Held that:- The Hon’ble High Court once again directed the respondent No.2 to release the goods once the writ applicant deposits an amount of Rs. 18 Lakh towards the tax and penalty and executes a bond for the balance amount of Rs. 52 Lakh.
There is a fine distinction between the bond and bank guarantee. The difference between a Bank Guarantee and a Bond is that to obtain a Bank Guarantee, there is a requirement of collateral to satisfy the bank, while Bonds do not need collateral to act as a surety. We direct the respondent to release the goods.
Section 129 and 130 of the CGST Act, 2017— Goods in Transit —– The applicant prayed for clarifying that the “bond” as mentioned in order dated 8.2.2021 is not required to be accompanied by bank guarantee/security and that the goods/vehicle are required to be released on the basis of challan and bond. The court in its order dated 08.02.2021 has held that for the balance amount towards fine of Rs. 52 Lakh, the writ applicant shall execute a bond to the satisfaction of the respondent No.2 with an undertaking that ultimately, if the goods are held liable to be confiscated, he shall make good the entire payment towards fine in lieu of confiscation. The court observed that the respondent No.2 being an officer of the GST Department has no idea as to what is a “bond” and what is a “bank guarantee”. The order in the main matter is dated 08.02.2021 and almost one month has passed, but the respondent No.2 has not given effect to order only because of his misconception of law. Bond means bond in accordance with law and not the bank guarantee in its true sense. The difference between a Bank Guarantee and a Bond is that to obtain a Bank Guarantee, there is a requirement of collateral to satisfy the bank, while Bonds do not need collateral to act as a surety.
Held that:- The Hon’ble High Court once again directed the respondent No.2 to release the goods once the writ applicant deposits an amount of Rs. 18 Lakh towards the tax and penalty and executes a bond for the balance amount of Rs. 52 Lakh.