Facts of the Case

Fasalurahman P.T., aged 39, proprietor of National Enterprises, Parappirivu, Pudussery, Palakkad, Kerala, filed WP(C) No.38396 of 2023 before the Kerala High Court against the Deputy Enforcement Officer and Senior Enforcement Officer of Enforcement Squad No.1, State GST Department, Ernakulam, along with the Secretary to Taxes (Kerala), the CBIC, and the Union of India. A bill of supply and an e-way bill, both dated 17.10.2023, accompanied goods carried in truck no. KL55Z3669. A show cause notice under Section 130 of the CGST and Kerala GST Acts, 2017 (Form GST MOV-10) was issued on 24.10.2023, to which the petitioner replied on 28.10.2023. Respondent No.2 nevertheless passed a confiscation order dated 02.11.2023, prompting the writ petition, heard and decided on 17.11.2023 by Justice Dinesh Kumar Singh.

Issues Involved

  1. Whether the confiscation order dated 02.11.2023 passed under Section 130 could be quashed by writ, given the availability of a statutory appeal under Section 107.
  2. Whether the presumption of culpable mental state under Section 135, available to the department only in prosecution, could also be invoked to sustain confiscation under Section 130.
  3. Whether the truck and goods detained ought to be released by quashing the detention notices/orders.

Petitioner's Arguments

  • The confiscation order (Ext.P6) dated 02.11.2023 was arbitrary and liable to be quashed by a writ of certiorari.
  • Section 135's presumption of culpable mental state is available to the department only for the purpose of prosecution, and not for the purpose of confiscation proceedings under Section 130 — so the confiscation could not rest on that presumption.
  • The truck bearing registration KL55Z3669, together with the goods carried, should be released forthwith by quashing the detention notices/orders issued for that purpose.
  • The petitioner had already replied to the show cause notice (Ext.P4) and possessed valid supporting documents — GST registration (Ext.P1), a bill of supply and e-way bill both dated 17.10.2023 (Ext.P2/P2a), and a portal screenshot of the goods declared (Ext.P5).

Respondent's Arguments

  • The order does not record independent submissions by the respondent authorities beyond the Government Pleader's appearance; the department's position is reflected only in the fact that a confiscation order under Section 130 had already been passed after considering the petitioner's reply.
  • No specific opposition to the writ's maintainability was recorded beyond the existence of the alternate statutory remedy, on which the Court itself ultimately relied.

Court Order/Findings

  • The Court observed that a statutory remedy of appeal under Section 107 of the CGST/SGST Act, 2017 was available against the impugned confiscation order.
  • Finding no ground to entertain the writ petition given the availability of an efficacious alternate remedy, the Court declined to examine the merits of the confiscation order or the Section 130/Section 135 argument on presumption of culpable mental state.
  • The writ petition was disposed of with liberty to the petitioner to approach the Appellate Authority under Section 107, with a direction that any appeal filed be decided in accordance with law, expeditiously.

Important Clarification

  • Courts routinely decline to entertain writ petitions against GST confiscation orders passed under Section 130 where the statutory appellate remedy under Section 107 of the CGST/SGST Act remains available and unexhausted.
  • The argument that Section 135's presumption of culpable mental state applies only to prosecution and not to confiscation proceedings under Section 130 was left open and undecided on merits; it remains available to be urged before the Appellate Authority.
  • Where recourse to appeal is directed, courts often specifically direct expeditious disposal, which can be relied upon to seek an early hearing before the appellate forum.

Sections Involved

  • Section 130, CGST Act, 2017 — confiscation of goods and conveyances and levy of penalty for contravention.
  • Section 135, CGST Act, 2017 — presumption of culpable mental state in prosecution proceedings.
  • Section 107, CGST/SGST Act, 2017 — statutory appeal against orders passed under the Act.

Decision – In Favour of

Disposed of with liberty to the petitioner to pursue the statutory appeal — a procedural outcome rather than a decision on merits for either side. The confiscation order was left undisturbed pending appeal, so, on the facts as recorded, the disposal is marginally in favour of the Department, without prejudice to the petitioner's substantive contentions before the Appellate Authority.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Kerala High Court, Ernakulam
  • Case No.: WP(C) No.38396 of 2023
  • CNR: Not available on record
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 17.11.2023
  • Disposal Nature: Disposed of with liberty to appeal under Section 107 of the CGST/SGST Act

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