2026 (3) TMI 296 - HC - GST

Detention and confiscation of perishable transit goods: 30 day stay, auction with proceeds preserved, vehicle conditionally released pending appeal.

The note addresses detention and confiscation of goods in transit under the GST statutory scheme and interim relief for perishable consignments. It ... Statutory appeal under Section 107 of the CGST Act - stay of impugned order - public auction of perishable goods - custody of sale proceeds in an interest-bearing account pending appeal - release of detained vehicle on payment and furnishing of bond. Statutory appeal under Section 107 of the CGST Act - stay of impugned order - Right to prefer statutory appeal and interim suspension of the impugned order - HELD THAT: - The Court found that the petitioner is entitled to pursue the statutory remedy under Section 107 of the CGST Act and extended the period of limitation in the interest of justice. While the Court did not adjudicate the merits of the impugned detention and penalty order, it directed that the petitioner may prefer the statutory appeal within 30 days from the date of this order and granted a limited stay of the impugned order for the same 30 day period. If no appeal is filed within that period, the stay will automatically cease and the authorities may proceed in accordance with law. [Paras 17] Petitioner permitted to file statutory appeal within 30 days; limitation extended for 30 days and the impugned order stayed for 30 days, after which the stay will lapse if no appeal is filed. Public auction of perishable goods - participation of consignor in auction - Procedure for disposal of seized perishable goods pending appeal - HELD THAT: - Relying on earlier Division Bench directions in S.N. Trading Company & Anr. Vs Union of India & Ors.[2025 (7) TMI 618 - CALCUTTA HIGH COURT], the Court ordered that the seized perishable goods (dried areca nuts) shall be sold by the department through public auction at the earliest, preferably within 45 days. The consignor (appellant) is permitted to participate in the auction. This direction addresses the practical handling of perishable seized goods while appellate rights remain available and does not determine the underlying ownership or liability on the merits. [Paras 18, 21] Respondents to call public auction for the perishable goods (consignor may participate); sale to be completed preferably within 45 days. Custody of sale proceeds in an interest-bearing account pending appeal - HELD THAT: - The Court directed that amounts realised from the auction shall be retained by the department, preferably in an interest-bearing account, and shall abide by the ultimate orders that may be passed by the appellate authority. This preserves the monetary proceeds pending resolution of the statutory appeal without deciding entitlement to the funds on merits. [Paras 19] Proceeds from sale to be retained by the department in an interest-bearing account and to abide by outcome of the appeal. Release of detained vehicle on payment and furnishing of bond - HELD THAT: - The Court directed release of the detained vehicle on the terms specified: payment of a specified sum and furnishing a bond undertaking to produce the vehicle if required. The directions are provisional and expressly subject to the outcome of the statutory appeal, thereby balancing the interim relief to the petitioner with protection of revenue and the appellate process. [Paras 20, 21] Vehicle to be released on payment of the specified sum and on furnishing the directed bond; such release is subject to the outcome of the appeal. Final Conclusion: The writ petition was disposed by permitting the petitioner to file a statutory appeal within 30 days (limitation extended) and by staying the impugned order for 30 days; the Court directed sale of the perishable goods by public auction (allowing the consignor to participate), retention of sale proceeds in an interest-bearing account pending the appeal, and conditional release of the detained vehicle on payment and bond, with all interim measures subject to the appellate outcome. Issues: Whether the impugned order detaining goods and vehicle should be stayed temporarily and whether directions should be issued for (a) sale of the perishable goods by public auction with deposit to be kept pending appeal, and (b) conditional release of the vehicle on payment and bond, while permitting the petitioner to prefer a statutory appeal under Section 107 of the CGST Act, 2017.Analysis: The Court examined the statutory scheme under the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 concerning detention and confiscation of goods in transit (including Sections 68 and 129 of the Central Goods and Services Tax Act, 2017 and Section 20 of the Integrated Goods and Services Tax Act, 2017), the rules governing documents carried in transit (including Rule 138A(1)(a) and (b) of the Central Goods and Services Tax Rules, 2017), and the appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017. The Court noted precedents dealing with perishable consignments and interim relief (including Division Bench directions permitting deposit, auction and participation by the owner). Balancing the need to protect perishable goods from deterioration and the departmental interest in preserving fiscal rights, the Court extended time for filing the statutory appeal, granted a limited stay of the impugned order for 30 days, directed that the goods be sold by public auction with proceeds to be preserved pending the appellate outcome, and ordered conditional release of the vehicle on payment and furnishing of a bond, all subject to the outcome of the statutory appeal.Conclusion: The petitioner is permitted to prefer a statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 within 30 days (limitation extended 30 days); the impugned order is stayed for 30 days; the respondents are directed to sell the perishable goods by public auction and retain proceeds pending appeal; and the vehicle shall be released on payment of Rs. 50,000 and furnishing a bond for Rs. 1,50,000, all subject to the appellate outcome.