Court Rules Retention of Goods Without Detention Order Violates Constitutional Property Rights Under Article 300A
In a significant judgment, the Kerala High Court, presided over by Justice Ziyad Rahman A.A., ruled in favor of M/s. Authentic Metals, ordering the immediate release of detained goods by GST authorities. The court held that the retention of goods during transit, without a statutory detention order under Section 129 of the Central Goods and Services Tax (CGST) Act, 2017, is illegal and violates constitutional property rights under Article 300A.
The case arose when M/s. Authentic Metals' goods were detained by GST authorities for verification, despite having valid invoices and e-way bills. The authorities proposed confiscation under Section 130 of the CGST Act, demanding a fine in lieu of confiscation. The petitioner challenged the detention and sought provisional release upon payment of the proposed fine.
Justice Rahman emphasized that Section 130(2) of the CGST Act does not permit provisional release of goods pending confiscation proceedings. The court noted that the statutory scheme mandates a detention order under Section 129 for lawful retention, which was not issued in this case. Consequently, the court directed the release of goods upon the petitioner furnishing a simple bond.
The judgment highlights the importance of adhering to statutory procedures and timelines for detention and confiscation under GST laws, reinforcing the protection of property rights as enshrined in the Constitution.
Bottom Line:
GST Law - Provisional release of goods under Section 130(2) of CGST Act not permissible - Retention of goods by authorities without detention order under Section 129 is illegal - Authorities bound to release goods if detention procedure is not followed.
Statutory provision(s): Article 300A of the Constitution of India, Central Goods and Services Tax Act, 2017 Sections 67, 68, 129, 130
M/s. Authentic Metals v. Enforcement Officer, (Kerala) : Law Finder Doc id # 2856804
