GST Confiscated Goods Can Be Released During Appeal: Kerala High Court Explains Relief Under Section 130
Focus Keyphrase: GST confiscated goods
In a significant judgment that brings relief to businesses, the Kerala High Court recently ruled that GST confiscated goods can be released during the pendency of an appeal, provided they have not yet been auctioned. This ruling provides much-needed clarity on Section 130 of the CGST Act, which deals with confiscation of goods and conveyance in transit.
What Does Section 130 of CGST Act Say?
Section 130 empowers GST officers to confiscate goods and vehicles if they believe there’s an intent to evade tax. Confiscation under this section is separate from seizure, and usually follows serious violations like:
- Goods without valid documents
- Misdeclaration of value or quantity
- Use of fake invoices
Upon confiscation:
- Goods are seized and ownership is taken over by the department
- A notice under Section 130(1) is issued
- The taxpayer may file an appeal under Section 107 of the CGST Act
Key Facts from the Kerala High Court Judgment
Case Title: M/s Indus Motors v. State Tax Officer
Citation: Kerala HC, June 2025
Issue: Can confiscated goods be released pending appeal if auction hasn’t taken place?
Court’s Observations:
- Merely because goods are confiscated doesn’t mean they are irretrievably lost to the taxpayer.
- Section 130 does not bar release of goods during appeal unless they are already auctioned by the department.
- If no auction has taken place, the taxpayer retains the right to seek interim relief.
- Denial of such release would undermine appellate rights and violate principles of natural justice.
Expert Perspective: Why This Matters for Businesses
According to GST experts, this judgment sets a pro-taxpayer precedent. Here’s why:
- Many businesses face logistics delays and financial losses due to prolonged detention/confiscation.
- Often, appeals take months to be heard, making it unjust to hold goods indefinitely.
- The ruling ensures that business continuity is preserved unless there’s clear evidence of tax fraud.
📝 Expert Tip: Always keep valid e-Way Bills and invoices during transportation. If faced with a confiscation notice, file a proper appeal along with a stay application to protect your rights.
Practical Takeaways for Taxpayers
✅ Confiscation ≠ Final loss: If you’ve appealed, ask for goods release unless auctioned.
✅ Check auction status: If goods haven’t been auctioned yet, you can seek interim release.
✅ Maintain documentation: Proper transport documents help in case of legal challenge.
✅ File timely appeal: Under Section 107, appeal must be filed within 3 months of order.
Legal Provisions Referenced
- 📜 Section 130, CGST Act, 2017 – Confiscation of goods/conveyance
- 📜 Section 107, CGST Act, 2017 – Appeal to Appellate Authority
- ⚖️ Kerala High Court ruling, June 2025 – Indus Motors v. STO
- 🚚 Relevant CBIC FAQs on e-Way Bills: ewaybillgst.gov.in
Internal Link
📚 Related Blog: GST Appeal Process Simplified: Step-by-Step Guide for 2025
FAQ: GST Confiscated Goods
Q1. Can I get back my goods after confiscation under GST?
Yes, if the goods haven’t been auctioned and you’ve filed an appeal, the High Court says you can request release.
Q2. What if the department has already auctioned the goods?
Once auctioned, reclaiming goods becomes difficult. You may be eligible for compensation if you win the appeal.
Q3. How soon should I file an appeal under GST law?
You must file an appeal within 3 months from the date of the confiscation order, extendable by 1 month with sufficient cause.
Summary
The Kerala High Court ruled that GST confiscated goods can be released during appeal if they haven’t been auctioned yet. This clarifies that taxpayers retain the right to seek interim relief under Section 130 of the CGST Act while challenging the order.
Conclusion: Protect Your Business Rights
The Kerala High Court’s decision is a positive move toward balancing enforcement with fairness under GST law. If you or your client are facing confiscation issues, act fast—appeal and seek release before auction.
🔗 Need help filing GST appeals or protecting your goods? Connect with Efiletax Experts — fast, affordable, and legally sound support.