2023 (8) TMI 1406 - HC - GST

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

M/s. Ravi Trading Company Versus Commercial Tax Officer (Enforcement - 7), Hubballi, Joint Commissioner of Commercial Taxes (Appeal), Assistant Commissioner of Commercial Taxes, Commissioner of Commercial Taxes, Bengaluru, The State of Karnataka

The HC addressed a challenge to detention and confiscation of perishable arecanuts under GST Act. The Court directed release of goods upon depositing 20% ... Seeking release of detained goods - arecanut - goods of perishable nature - HELD THAT:- In the present case on hand, it is not in dispute that the goods confiscated is perishable in nature. The goods seized is a arecanut. The order of detention was passed on 06.12.2022. The authority without passing an order under Section 129 of the GST Act, however, felt that confiscation is warranted under Section 130 of the GST Act and therefore, proceeded to confiscate the goods. The order of confiscation is passed on 09.01.2023. Almost 8-months 2-days has lapsed from the date of detention of the goods, which are admittedly perishable in nature. Proviso to Section 129(6) of the GST Act, imposes duty on the authority to deal with perishable goods which are likely to depreciate in value with passage of time, is required to dispose of within 15 days and further discretion is vested with the Officer to reduce that 15 days. De hors the provisions of Section 130 of the GST Act, this Court is compelled to exercise discretion in favour of petitioner having taken cognizance of the laxness on the part of the authorities in not dealing with the perishable goods as contemplated under GST Act. It is directed that respondent Nos. 1 and 3 shall release the goods confiscated and detained pursuant to order dated 06.12.2022 and 09.01.2023 passed in Form GST MOV-06 and Form GST MOV-11 respectively, subject to conditions imposed - petition allowed. 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 confiscationThe 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 ActThe 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: NoneThis summary provides a detailed overview of the judgment, highlighting the key issues and the Court's decision on each issue.