Perishable Goods Under GST: Authorities Fail to Dispose, Court Orders Conditional Release of Arecanuts with 20% Deposit

The HC addressed a challenge to detention and confiscation of perishable arecanuts under GST Act. The Court directed release of goods upon depositing 20% of demanded amount and furnishing a bond, noting authorities' failure to dispose of perishable goods within statutory 15-day period. The judgment emphasized procedural compliance and protection of goods' value, allowing conditional release despite pending appeal.

---

---

Issues involved: Challenge to impugned order of detention and confiscation, release of goods confiscated under Section 130 of the GST Act.

Judgment Details:

Issue 1: Challenge to impugned order of detention and confiscation

The petitioner challenged the impugned order of detention and confiscation passed by respondent No. 1 and the order passed by the Appellate Authority. The petitioner cited a judgment from the Division Bench of the Gujarat High Court in an identical case, arguing for the release of goods subject to complying with mandatory requirements under Section 112(8) of the GST Act. The respondent, however, contended that once goods are confiscated under Section 130 of the GST Act, they automatically vest with the State, citing a judgment from the Hon'ble Apex Court. The Court noted that the judgment cited by the respondent did not preclude the release of goods post-confiscation, especially when the goods are perishable. The Court referred to two Division Bench Judgments from the Gujarat High Court where goods were released upon depositing taxes, penalty, and a bond equivalent to the fine.

Issue 2: Release of goods confiscated under Section 130 of the GST Act

The Court observed that the goods confiscated in the present case were perishable arecanuts, detained since December 2022 and confiscated in January 2023. The authority failed to comply with the requirement to dispose of perishable goods within 15 days as mandated by Section 129(6) of the GST Act. Despite the respondent's argument that an appeal was pending, the Court held that the authority's inaction in dealing with the perishable goods was detrimental to both the owner and the State. The Court directed the release of the goods upon the petitioner depositing 20% of the demanded amount and furnishing a bond, considering the laxness of the authorities in handling the perishable goods.

Separate Judgment: None

This summary provides a detailed overview of the judgment, highlighting the key issues and the Court's decision on each issue.

---