Facts of the Case

The petitioner, M. Abdul Nazir, proprietor of M/s A N Trader, Kozhikode, was aggrieved by an order dated 04.12.2021 (Ext.P1) passed under Section 130 of the CGST Act, 2017, confiscating his goods and conveyance and demanding tax, fine and penalty in FORM GST MOV-II. Ext.P1 permitted redemption of the goods and conveyance on payment of tax, penalty and fine within 90 days, a period due to expire on 04.03.2022. The petitioner filed a statutory appeal under Section 107 of the Act on 18.01.2022 against Ext.P1. On the same day, the first respondent issued Ext.P5, a subsequent notice intimating that the 90-day period stood reduced to 60 days, failing which the confiscated goods would be put to auction. Contending that this reduction was illegal, the petitioner filed the present writ petition on 11.02.2022. The Court had earlier, on 28.02.2022, directed the respondents to file a counter affidavit, for which the Government Pleader sought further time.

Issues Involved

  1. Whether the first respondent could validly curtail, by a subsequent notice (Ext.P5), the 90-day period for redemption/auction of confiscated goods that had already been fixed under the original confiscation order (Ext.P1).
  2. Whether, given that a Section 107 appeal against Ext.P1 was already pending, the writ petition ought to be adjudicated on merits or disposed of by directing expeditious consideration of that appeal.

Petitioner's Arguments

  • Ext.P1 fixed a 90-day window for redemption of the confiscated goods and conveyance, expiring only on 04.03.2022.
  • Ext.P5, issued on 18.01.2022, illegally and unilaterally reduced this statutorily contemplated period to 60 days, threatening auction on non-compliance.
  • The petitioner had already preferred an appeal under Section 107 of the CGST Act against Ext.P1, evidenced by a provisional acknowledgment (Ext.P4), and relied on earlier judgments of the Court (Ext.P2 and Ext.P3) on similar curtailment of the redemption period.
  • The reduction in the period was illegal for various reasons and warranted interference by the Court.

Respondent's Arguments

  • The first respondent had filed a statement in the proceedings, and the Government Pleader sought additional time to file a detailed counter affidavit pursuant to the Court's earlier direction dated 28.02.2022.
  • No substantive contest to the petitioner's factual narrative regarding Ext.P1 and Ext.P5 was recorded in the Court's order.

Court Order/Findings

  • The Court observed that Ext.P1 had itself fixed 90 days for redemption of the confiscated goods, expiring on 04.03.2022, whereas Ext.P5, issued on 18.01.2022, purported to reduce this to 60 days.
  • Since it was admitted that the petitioner had already preferred an appeal under Section 107 against Ext.P1, the Court held it would suffice to direct expeditious consideration of that appeal rather than adjudicate the questions raised regarding the validity of Ext.P5.
  • The second respondent, the Joint Commissioner (Appeals), was directed to consider and dispose of the pending appeal as expeditiously as possible, and in any event within an outer limit of two months from receipt of a copy of the judgment.
  • The interim stay against auction of the confiscated goods was directed to continue until orders were passed on the appeal.
  • The questions raised in the writ petition, including the legality of the reduction in the redemption period, were left open, and the writ petition was disposed of accordingly.

Important Clarification

  • Where an assessee has already invoked the appellate remedy under Section 107 of the CGST Act against a confiscation order passed under Section 130, a High Court may decline to independently adjudicate the legality of an intervening notice curtailing the redemption/auction period, and instead direct time-bound disposal of the pending appeal.
  • Pending such time-bound disposal, courts commonly continue any interim protection (such as a stay on auction) already in place, ensuring the assessee is not prejudiced while the appellate authority takes up the matter.
  • This disposal does not amount to a finding on the legality of curtailing statutory redemption periods; that question remains open for adjudication in an appropriate case.

Sections Involved

  • Section 130, CGST Act, 2017 — provides for confiscation of goods or conveyances and levy of fine in lieu of confiscation, along with tax and penalty.
  • Section 107, CGST Act, 2017 — provides the statutory appellate remedy against orders such as confiscation orders passed under Section 130.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee — the Court did not rule on the legality of the reduced redemption period but protected the petitioner by continuing the interim stay on auction and directing time-bound disposal of the pending Section 107 appeal within two months.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.4690 of 2022
  • Coram: Hon'ble Mr. Justice Bechu Kurian Thomas
  • Date of Judgment: 25.03.2022
  • Petitioner's Counsel: Advocates Judy James and Sarun Rajan
  • Respondents' Counsel: Sr. Government Pleader Smt. Tushara James

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