Kerala HC Dismisses Writ to Release Seized 380 Bags of Areca Nuts, Declines to Interfere with Section 130 Notice [Read Order]

The Kerala High Court dismissed a writ petition filed by an arecanut trader challenging the initiation of confiscation proceedings under Section 130 of the CGST Act, ruling that the petitioner could not bypass statutory adjudication mechanisms when factual disputes regarding tax evasion were pending.

The Court held that since the notice under challenge was merely a show-cause notice for inquiry, the petitioner was obligated to raise all objections before the statutory authority rather than approaching the High Court under Article 226.

Jamaludin, the petitioner and proprietor of M/s. Bandadka Traders, approached the Court seeking to quash Form GST DRC-01 and Form GST MOV-10 dated May 2026. He sought the release of a seized consignment comprising 380 bags of arecanut and a commercial conveyance.

The petitioner advanced serious allegations against the enforcement squad, claiming that his statement under Section 70 of the CGST Act was extracted through coercion, duress, and explicit threats. He contended that the statement was inadmissible and prayed for an independent inquiry into the alleged coercive interrogation methods employed by the respondents.

The Government Pleader, appearing for the State Tax Department, strongly opposed the petition by bringing to the Court’s attention the history of litigation between the parties. It was pointed out that the petitioner had previously challenged the initial detention proceedings under Section 129 of the CGST Act in W.P(C) No. 1984 of 2026.

The Single Judge had rejected those contentions, a decision which was subsequently affirmed by the Division Bench. The Department argued that the current petition was an attempt to re-agitate issues already settled by the Court and that the petitioner ought to participate in the statutory adjudication process now initiated under Section 130.

Justice Ziyad Rahman A.A. observed that the earlier judgments had already identified serious discrepancies in the transactions carried out by the petitioner, justifying the initiation of proceedings. The Court noted that the observations made by the Division Bench were binding and that the factual contentions raised by the petitioner had been previously considered and rejected.

Regarding the challenge to the Section 130 notice, the Court held that it was essentially a notice of inquiry, providing the petitioner with an opportunity to present his case. The Court held that the writ jurisdiction should not be invoked to bypass statutory remedies, especially when the issues involve disputed questions of fact which are best adjudicated by the revenue authorities.

Consequently, finding no justifiable reason to interfere at the stage of show-cause notice, the High Court dismissed the writ petition, leaving the petitioner to pursue his statutory remedies before the adjudicating authority.

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