Provisional release of seized goods is not available under the confiscation provision; unlawful detention requires valid statutory detention order.

The court held that the statutory text and amendments preclude reading a provisional release power into the confiscation provision; Section 130(2) contemplates release consequent to authorization/confiscation and does not permit provisional release pending adjudication. The court further ruled that retention of goods/conveyance in transit is lawful only where detention is effected by a valid order passed under the prescribed statutory procedure and timelines; mere inspection forms, MOV-02 directions, or initiation of confiscation proceedings do not constitute lawful detention. Result: unlawful retention ordered released on bond pending adjudication of confiscation proceedings.

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Issues: (i) Whether Section 130(2) of the Central Goods and Services Tax Act, 2017 permits provisional release of goods pending adjudication by accepting fine in lieu of confiscation; (ii) Whether authorities can retain possession of goods/conveyance proposed for confiscation pending final confiscation in the absence of an order of detention under the statutory procedure.

Issue (i): Whether Section 130(2) permits provisional release of goods by payment of fine in lieu of confiscation pending adjudication.

Analysis: The Court examined the statutory text of Section 130 read with Section 130(7), the amendments effected by the Finance Act, 2021, and the specific provision for provisional release under Section 67(6). It noted deletion of earlier provisos and the removal of subsection cross-references that previously enabled provisional release practices, observed that Section 130(2) speaks of release in the context of an authorisation to confiscate (i.e., upon final confiscation order), and that the statutory scheme provides provisional release expressly under other provisions but not under Section 130. The Court applied principles of statutory interpretation, including expressio unius est exclusio alterius, and considered precedents and prior orders dealing with provisional release but distinguished them in light of legislative amendments.

Conclusion: Section 130(2) does not permit provisional release of goods pending adjudication; the provision contemplates release consequent to or after authorization/confiscation. (Conclusion against the assessee's claim that Section 130(2) permits provisional release.)

Issue (ii): Whether authorities may retain possession of goods/conveyance proposed for confiscation absent a valid order of detention passed following the procedure and timelines in Section 129 and the Board's Circular.

Analysis: The Court analysed Sections 67, 68, 129 and the Board's Circular issued under Section 168(1), observing that inspection powers under Section 68 and forms MOV-1/MOV-2/MOV-4 are for inspection and have prescribed timelines. Detention in transit requires an order of detention under Section 129 with the statutory timelines; mere directions in MOV-02 or initiation of Section 130 proceedings do not constitute lawful detention. The Court held that retention without the statutory order and within the prescribed timelines violated the owner's proprietary right under Article 300A and that possession can be lawfully continued only if the detention procedure in Section 129 is validly invoked or after a confiscation order under Section 130 followed by taking possession.

Conclusion: The respondents were not entitled to continue detention of the goods in the absence of a valid detention order under Section 129; retention was illegal and the petitioner is entitled to release of the goods. (Conclusion in favour of the assessee on unlawful retention.)

Final Conclusion: The writ petition is allowed to the extent of directing release of the detained goods forthwith upon the petitioner furnishing a simple bond; the statutory confiscation proceedings under Section 130 shall be adjudicated by the competent authority after giving the petitioner an opportunity to be heard.

Ratio Decidendi: Where the statute expressly provides for provisional release under a specific provision, that power cannot be read into a different provision; Section 130(2) provides for release in consequence of final confiscation authorization and does not authorize provisional release pending adjudication, and detention of goods in transit is lawful only if effected by an order under the statutory procedure in Section 129 within the prescribed timelines.

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