Confiscated Goods u/s 130 of GST Act Can be released During Pendency of Appeal When Not Auctioned: Kerala HC [Read Order]

The assessee/petitioner, Nikhil Ayyappan, used a conveyance to send certain scrap items. The Enforcement Officer/2nd respondent stopped the aforementioned car while it was in route. Following the discovery of several inconsistencies, Section 130 of the GST Act was invoked, which finally led to a confiscation order.

According to Section 130 of the GST Act, the assessee/petitioner is arguing against the confiscation order issued by the Enforcement Officer/second respondent. The aforementioned order established that the fine in lieu of confiscating the items was Rs. 10,82,539 under the CGST Act and Rs. 10,82,539 under the KSGST Act. Additionally, within a maximum of three months, the aforementioned ruling mandated that the confiscated products be returned to the source with the option to pay a penalty and fine in lieu of confiscation.

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An appeal has already been filed by the assessee against the confiscation order. The assessee was served with notice in the interim, informing them that the car would be put up for auction unless they provided an order of stay. The bench was asked to decide whether to release the commodities that had previously been seized under Section 130 of the GST Act while the appeal was being considered.

The department emphasized that the legislative provisions in Section 130 do not allow for the release of the impounded items in a manner other than that which is authorized by Sections 130(2) or 130(7) of the CGST Act. It was also argued that, in terms of Subsection 7 of Section 130 of the CGST Act, it considers three months to be a sufficient amount of time to give the individual in question the chance to have the confiscated items freed in exchange for a fine.

A single bench of Justice Ziyad Rahman A.A. observed that it is true that the assessee has previously been given the aforementioned choice in accordance with the confiscation order, but the time frame specified therein has already passed. But according to the department, the products haven't been sold yet.

After observing that the commodities are allegedly not sold, the bench found no justification for denying the assessee the chance to choose to have the goods released by paying a fine in lieu of confiscation. The department was instructed to release the products by the bench.

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