Court rules in favor of petitioner, allows deposit of tax & penalty before goods confiscation. Provisional release granted pending appeal.

The court ruled in favor of the petitioner, emphasizing the right to deposit tax and penalty before goods are confiscated. It directed provisional release of goods under Rule 140(1) of CGST Rules, allowing appeal against confiscation. The court instructed that goods should be provisionally released pending appeal outcome, with the Bank Guarantee safeguarded until final disposal. It also stressed the need for prompt appeal resolution by the Appellate Authority within two months.

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Issues:
1. Opportunity for depositing tax and penalty before confiscation of goods.
2. Provisional release of goods under Rule 140(1) of CGST Rules.
3. Availability of appeal for redressal of grievances.

Analysis:
Issue 1: The petitioner challenged the confiscation of goods without being given an opportunity to deposit the tax and penalty demanded. The court noted that the petitioner was not provided with the requisite 14-day period to make the payment before the final order of confiscation was passed. The court emphasized that under Section 129, there should be a chance for provisional release of goods before any decision under Section 130 is made. The court directed that the petitioner should be given a chance to avail provisional release under Rule 140(1) if the conditions are fulfilled.

Issue 2: The court observed that the petitioner had the right to challenge the order of confiscation before the Appellate Authority. It directed that if the petitioner meets the conditions of Rule 140(1) of CGST Rules, the goods should be provisionally released by the respondents, pending the final outcome of the appeal. The court also instructed that the Bank Guarantee submitted by the petitioner should not be encashed until the appeal is finally disposed of.

Issue 3: The petitioner had filed an appeal as per the court's directions, but the second appeal to the Tribunal was not possible as it had not been constituted yet. The court issued notice to the respondent(s) to appear on a specified date. In the meantime, it directed the provisional release of goods if the petitioner fulfills the conditions of Rule 140(1) of the CGST Rules, with the Bank Guarantee not to be encashed until the final disposal of the writ petition. The court emphasized the importance of the Appellate Authority deciding the appeal promptly, preferably within two months.

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