Case Details: Shish Jewels Pvt. Ltd. v. Intelligence Officer (2025) 26 CENTAX 342 (Ker.)
Judiciary and Counsel Details
- Murali Purushothaman, J.
- S/Shri K. Sreekumar, Aji V. Dev, Alan Priyadarshi Dev, S. Sajeevan & Ammu Charles, Advs. for the Petitioner.
- S/Shri Mohammed Rafiq, SPL. GP, Sreelal N. Warrier, SC, Central GST (CGST), P. Rani Diothima & Saijesh A. for the Respondent.
Facts of the Case
The petitioner is engaged in wholesale trading of gold, precious metals, and ornaments. The company deputed marketing executives to exhibit sample goods, including diamond gold jewellery, to dealers in different states. While attempting to exhibit goods at a dealer’s premises in Kerala, the goods were seized by GST authorities, citing discrepancies in stock and alleging contravention of GST provisions. A show-cause notice under Section 130 of the SGST Act was issued to the petitioner, who, in response, provided a bond for the value of the goods and paid the penalty amount as per the notice, seeking the provisional release of the goods. The authorities rejected the petitioner’s request, stating that Section 130 does not provide for the provisional release of goods.
The petitioner contended that the goods were legally transported with valid delivery challans, and there was no intention to evade taxes. Under Section 67(6) of the GST Act, the goods should be provisionally released upon the execution of a bond and payment of applicable penalties. The respondent contended that Section 130 does not allow the provisional release of goods during the adjudication of the show-cause notice, and the goods were seized due to potential tax evasion. The department is within its rights to retain them pending final adjudication.
High Court Held
The High Court noted that there is no provision under Section 130 that prohibits the provisional release of goods. Even during the adjudication process, the goods can be released if the owner pays the penalty and executes a bond. The Court emphasized that provisional release does not prejudice the department, as the value of the goods is secured.
Therefore, the High Court set aside the authority’s order denying the provisional release of goods and directed that the goods be released to the petitioner, pending the adjudication of the show-cause notice. The legality of the seizure order and other contentions were left open for further adjudication.
List of Cases Cited
- Dhanlaxmi Metals v. State of Gujarat — [2022] 144 taxmann.com 53/[2023] 95 GST 165/2022 (67) G.S.T.L. 63 (Gujarat) — Referred [Para 9]
- Golden Traders v. Asstt. State Tax Officer — 2022 (67) G.S.T.L. 303 (Ker.) — Referred [Para 9]
- State of Punjab v. Shiv Enterprises and Others — 2023 SCC OnLine SC 271 — Referred [Para 10]
- Synergy Fertichem (P.) Ltd. v. State of Gujarat — 2019 (23) G.S.T.L. 176 (Guj.) — Referred [Para 9]
- Union of India v. Lexus Exports (P) Ltd. — (1997) 10 SCC 232 — Referred [Para 10]
- Weston Components Ltd. v. Commissioner of Customs, New Delhi — (2000) 1 SCC 565 — Referred [Para 9]
