Karnataka High Court: Goods Release & Redemption Rights Clarified

The High Court of Karnataka allowed the writ petition partially, directing the immediate release of goods and conveyance to the petitioner upon depositing the total amount mentioned in the Sec.130 notice. The court emphasized the owner's right to seek redemption even after confiscation and highlighted the procedural requirements for release based on relevant circulars and statutory provisions. The judgment clarified the legal provisions regarding the release of goods pending confiscation proceedings under the CGST Act, stressing the option for redemption of confiscated goods and conveyances by paying a fine.

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Issues:
Release of goods pending confiscation proceedings under Sec.130 of CGST Act, 2017.

Analysis:
The High Court of Karnataka considered a case involving the detention of goods and a vehicle under the CGST Act, 2017. The main issue was whether the goods could be released to the apparent owner pending the conclusion of delayed confiscation proceedings in accordance with Sec.130 of the Act. The petitioner, a registered dealer, had his goods seized after being intercepted while transporting pan masala and chewing tobacco. Despite the physical verification of goods being delayed, the detention order was issued without providing a notice for release. The petitioner sought release due to the perishable nature of the goods.

The respondents, represented by the learned AGA, opposed the Writ Petition, alleging illegal transport activities and initiating confiscatory proceedings under Sec.130 based on collected information. The court, after hearing arguments from both sides, granted limited indulgence in the matter. It highlighted the provisions of Sec.129 and Sec.130 of the Act, emphasizing the option for redemption of confiscated goods and conveyances by paying a fine. The court acknowledged the owner's right to seek redemption even after confiscation and stressed that the goods do not become res extra commercium or res nullius post-confiscation.

Furthermore, the court supported the petitioner's request for release based on a circular issued by the Central Board of Indirect Taxes and Customs. The circular outlined a short timeframe for concluding inspection proceedings and provided for the release of goods upon payment of tax and penalty. Citing clauses from the circular, the court allowed the writ petition in part, mandating the immediate release of goods and conveyance to the petitioner upon depositing the total amount mentioned in the Sec.130 notice, subject to the outcome of the confiscation proceedings. The court prohibited the petitioner from raising equity grounds due to the order and the subsequent release of goods and conveyance. All contentions were kept open, and costs were made easy.

This judgment clarifies the legal provisions regarding the release of goods pending confiscation proceedings under the CGST Act, emphasizing the owner's right to seek redemption and the procedural requirements for release based on relevant circulars and statutory provisions.

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