GST detention orders need a speaking decision and fair hearing; seized goods may be released on prescribed security.

An order under GST detention provisions cannot stand where the authority fails to consider objections and does not pass a speaking order after the statutory hearing, so the section 129 order and consequential section 130 proceedings were set aside. The court also noted that seized goods may be provisionally released under rule 140 on execution of a bond and furnishing of security by bank guarantee for the applicable tax, interest and penalty, and directed release on compliance with those conditions. The governing principle is that detention-related action must reflect a reasoned decision after affording an effective opportunity to be heard.

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Issues: (i) whether the order passed under section 129 and the consequential proceedings under section 130 could be sustained when the objections filed by the petitioner were not considered and no speaking order was passed; (ii) whether the seized goods were liable to be released provisionally under rule 140 on furnishing of security and bank guarantee.

Issue (i): whether the order passed under section 129 and the consequential proceedings under section 130 could be sustained when the objections filed by the petitioner were not considered and no speaking order was passed

Analysis: The statutory scheme under section 129 requires notice, opportunity of hearing, and determination of tax and penalty by a reasoned order before further proceedings under section 130 are initiated. An authority is bound to consider the objections placed before it and deal with them by giving reasons. Where the objections are ignored and the order proceeds on an assumption that no objection was filed, the decision is mechanical and reflects non-compliance with the hearing requirement.

Conclusion: The impugned order under section 129 and the consequential proceedings under section 130 were unsustainable and were set aside.

Issue (ii): whether the seized goods were liable to be released provisionally under rule 140 on furnishing of security and bank guarantee

Analysis: Rule 140 permits provisional release of seized goods on execution of a bond for the value of the goods and furnishing of security by way of bank guarantee equivalent to the applicable tax, interest and penalty. In view of the prayer for release and the nature of the goods, the rule furnished the basis for directing provisional release on the prescribed security conditions.

Conclusion: The seized goods were directed to be released in terms of rule 140 on the prescribed security conditions.

Final Conclusion: The writ petition succeeded to the extent that the detention and confiscation-related order was quashed and the respondents were directed to grant a fair hearing and release the goods on compliance with the security requirements.

Ratio Decidendi: An order under the goods and services tax detention provisions cannot be sustained unless the objections are considered and a reasoned decision is passed after affording the statutory opportunity of hearing, and seized goods may be provisionally released under the prescribed security mechanism.

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