Kerala HC: Confiscated Goods Under GST Can Be Returned if Not Auctioned

The Confiscated goods u/s 130 GST Act can be released in the pendency of an appeal if not yet auctioned, Kerala High Court cited.

The case was being addressed by Justice Ziyad Rahman A.A., where the grievance of the applicant is against the confiscation order passed by the Enforcement Officer/2nd respondent, under Section 130 of the GST Act.

The applicant, via a conveyance, dispatched particular scrap materials. At the time of transit, the said vehicle was intercepted by the Enforcement Officer/2nd respondent.

The proceedings u/s 130 of the GST Act were enacted, as irregularities were discovered, and therefore, it consequence in a confiscation order.

In the expressed order, the fine instead of confiscation of goods was determined as Rs. 10,82,539 under the CGST Act and Rs. 10,82,539 under the KSGST Act.

In the stated order, the order for the release of the confiscated goods was also there to the supplier with the option of a penalty payment and fine in lieu of the confiscation within a duration not exceeding 3 months.

The taxpayer against the confiscation order had made an appeal earlier. While the taxpayer was provided with the notice where it was intimated that the vehicle would be sold at auction unless the taxpayer filed an order of stay.

Before the bench, the issue was that if the goods already confiscated u/s 130 of the GST Act can be released pending consideration of the appeal.

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As per the department, for the statutory stipulations contained in Section 130, the same does not contemplate the release of the goods confiscated otherwise than in the case reflected u/s 130 (2) or 130 (7) of the CGST Act.

Concerning Sub Section 7 of Section 130 of the CGST Act, it specifies a 3-month period as a reasonable time to furnish a chance to the related person to get the confiscated goods released on the payment of a fine in lieu of the confiscation.

Under the bench, it was mentioned that as per the order of confiscation, the said option has been granted earlier before the taxpayer, though the period specified therein has already expired. But the goods had not sold so far, the department mentioned.

The bench, while observing that goods were not sold as per reports, and did not discover any reason to refuse the chance to the taxpayer to claim the option of obtaining the goods released, by filing the fine GST payment instead of the confiscation.

For the aforesaid, the bench asked the department to release the goods.