Deposit requirement for release of confiscated vehicle modified to Rs.2,00,000 deposit; vehicle to be released within one week.

Sub-section (8) requires an additional deposit of 20% of disputed tax over the amount under sub-section (6) of Section 107; sub-section (6) requires 10% deposit to invoke appellate remedy, and no such deposit was made in the earlier appeal. The interim direction is modified to require a deposit of Rs.2,00,000 before the Adjudicating Authority, and the seized vehicle is to be released within one week of that deposit while remaining conditions continue to operate until writ disposal. A contempt application for breach of the prior release direction is rejected because the complainant did not execute the required indemnity bond.

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Issues: (i) Whether the interim order directing release of the seized vehicle without strict compliance with Section 112(8) of the Karnataka Goods and Services Tax Act, 2017 is legally sustainable; (ii) Whether the contempt petition alleging disobedience of the interim order dated 02.04.2025 is maintainable.

Issue (i): Whether the interim release of the vehicle complied with the deposit requirement under Section 112(8) of the Karnataka Goods and Services Tax Act, 2017.

Analysis: Section 112(8) mandates deposit of 20% of the disputed tax in addition to the deposit required under Section 107(6), which together amount to 30% of the disputed tax for purposes of appeal. The adjudicating order under Section 130 quantified tax and penalty in respect of the vehicle at Rs. 6,01,304/-. The Single Judge had directed release of the vehicle on furnishing an indemnity bond for Rs. 2,00,000/-. The Court examined whether the indemnity bond as directed conformed with the statutory deposit threshold in sub-section (8) of Section 112, and considered the pendency of the writ petition and the need to protect revenue while affording interim relief.

Conclusion: The Single Judge's direction was not in strict conformity with Section 112(8), but the sum of Rs. 2,00,000/- was held to substantially meet the 30% deposit requirement for the vehicle. The interim order was modified to require deposit of Rs. 2,00,000/- before the Adjudicating Authority, with the remaining conditions of the Single Judge's order to continue; the Appellate Authorities were directed to release the vehicle within one week of such deposit.

Issue (ii): Whether the contempt petition for alleged disobedience of the interim order dated 02.04.2025 is maintainable.

Analysis: The contempt claim depended on non-compliance with the condition imposed by the interim order, namely execution of the indemnity bond by the complainant. The Court noted that the complainant had not complied with that condition; the Court also modified the earlier order in light of statutory requirements and directed deposit of Rs. 2,00,000/- as a condition for release.

Conclusion: The contempt petition is misconceived at this stage because the complainant had not fulfilled the condition incumbent upon him; in view of the modification of the impugned order, the contempt petition does not survive and stands disposed of.

Final Conclusion: The writ appeal is disposed of subject to modification of the interim order by directing deposit of Rs. 2,00,000/- and continuation of other conditions; the contempt petition is disposed of as not maintainable in the circumstances.

Ratio Decidendi: Where an Appellate Tribunal under the GST statute is not constituted and a writ court grants interim release of seized goods, such interim relief must conform to the deposit obligations prescribed by Section 112(8) (aggregate 30% deposit) unless a substituted security/amount is shown to sufficiently meet that statutory requirement.

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