2026-VIL-187-KER
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SGST High Court Cases

GST – Scope of Section 130(2) of the CGST Act, 2017 - Provisional Release of confiscated goods - The petitioner challenge the show cause notice proposing confiscation of goods and conveyance under Section 130 of the CGST Act - The petitioner sought the provisional release of the goods by paying the proposed fine in lieu of confiscation under Section 130(2) of the CGST Act - Whether the petitioner is entitled to the provisional release of the goods under Section 130(2) of the CGST Act, pending the adjudication of the confiscation proceedings - HELD – In view of the relevant statutory provisions and the amendments introduced by the Finance Act, 2021, the provisional release of goods is not contemplated under Section 130(2) of the CGST Act - What is intended under Section 130(2) is not a provisional release, but it is a release of the goods after confiscation and the amounts to be paid, are determined by way of final order of confiscation by the authority concerned. Nowhere in sub-section (2) of Section 130, any reference with regard to the provisional release of the goods is made - The release of goods under Section 130(2) is upon payment of fine in lieu of confiscation after the final order of confiscation, and not as a provisional measure pending the adjudication. The provisions for provisional release are specifically provided under Section 67(6) of the CGST Act, and the same is conspicuously absent in Section 130. Applying the principle of "expressio unius est exclusio alterius", the legislature's conscious omission of the provisional release provision in Section 130 indicates the legislative intent not to permit such provisional release under that provision. The power of provisional release being specifically provided under Section 67(6), cannot be extended to proceedings under Section 130 in the absence of an express statutory mandate. There is no scope for incorporating the concept of provisional release into Section 130(2) as a provisional measure, pending the adjudication proceedings, by accepting the fine in lieu of the confiscation proposed in the notice issued in Form MOV-10 - However, the respondents cannot retain the possession of the goods merely because the confiscation proceedings under Section 130 are initiated, in the absence of a valid detention order under Section 129 of the CGST Act. The respondents to release the goods upon the petitioner furnishing a simple bond, as the continued detention of the goods is found to be not legally sustainable - Whether the Respondents have the power to retain the goods proposed to be confiscated, until an order of confiscation is passed – HELD - In cases where no order or detention as contemplated under section 129(1) is passed, the officer concerned cannot hold the goods and conveyances in their possession, once the procedure for inspection as contemplated under clause 2(d) and (e) of Circular No.41/15/2018-GST dated 13.4.2018 is expired - A mere direction in Form MOV-2 restraining the person from taking the goods until further orders cannot substitute the requirement of passing an order or detention as provided in section 129(10). Since what is required is “order of detention”; necessarily it must be an order, highlighting the reasons for such detention, and it cannot be in the form of a simple direction - Mere initiation of proceedings under section 130 of the Act, by itself is not an authority for the officer concerned, to retain the goods in possession and such retention of possession can be made, only following the procedure for detention contemplated under section 129 of the Act - Any action of the officer concerned to retain the possession without passing an order of detention as contemplated under the Act would be illegal which would enable the party concerned to seek release of the goods and conveyances.
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