Goods Confiscated U/S 130 Of GST Act Can Be Released During Pendency Of Appeal If Not Auctioned: Kerala High Court

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

The assessee/petitioner dispatched certain scrap materials through a conveyance. During transit, the said vehicle was intercepted by the Enforcement Officer/2nd respondent.

As certain irregularities were found, the proceedings under Section 130 of the GST Act were initiated, and ultimately the same resulted in confiscation order.

In the said order, the fine in lieu of confiscation of goods was determined as Rs.10,82,539/- under CGST Act and Rs.10,82,539/- under KSGST Act. In the said order it was also ordered that the goods confiscated shall be released to the supplier with the option of payment of penalty and fine in lieu of confiscation within a period not exceeding three months.

As against confiscation order, the assessee has already submitted an appeal. In the meantime, the assessee was served with notice wherein, it was intimated that unless the assessee furnishes an order of stay, the vehicle will be sold in auction.

The issue before the bench was whether the goods already confiscated under Section 130 of the GST Act can be released, pending consideration of the appeal.

The department pointed out that, as far as the statutory stipulations contained in Section 130 is concerned, it does not contemplate for release of the goods confiscated otherwise than in the manner contemplated under Section 130 (2) or 130 (7) of the CGST Act.

It was further submitted that as far as Sub Section 7 of Section 130 of the CGST Act is concerned, it contemplates for a three-month period as a reasonable time, to provide an opportunity to the person concerned to get the confiscated goods released, upon payment of fine in lieu of confiscation.

The bench observed that it is true that as per confiscation order, the said option has already been granted to the assessee, but the period stipulated therein is already expired. However, it is submitted by the department that, the goods are not sold so far.

The bench after noting that the goods are not reportedly sold did not find any reason to deny the opportunity to the assessee to avail the option of getting the goods released, by making the payment of fine in lieu of the confiscation.

In view of the above, the bench directed the department to release the goods.

Case Title: Nikhil Ayyappan v. State of Kerala

Case Number: WP(C) NO. 19789 OF 2025

Citation: 2025 LiveLaw (Ker) 371

Counsel for Petitioner/ Assessee: Salim V.S., K. Muhammed Thoyyib, A.M. Fousi and A.B. Ajin

Counsel for Respondent/ Department: Muhammed Rafiq

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