HC Orders Release of Goods on Assessee’s Tax Compliance

Case Details: Sobha Enterprises vs. Asst. Enforcement Officer Enforcement Squad - [2025] 173 taxmann.com 904 (Kerala)

Judiciary and Counsel Details

• Bechu Kurian Thomas, J.
• S. Anil Kumar, Sabu C.J., Rahul A., Rajan K. for the Petitioner.
• Smt. Jasmin M.M., Government Pleader for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer under the CGST/Kerala GST Act, 2017, engaged in the purchase and supply of arecanut, had its vehicle intercepted by the department on while transporting goods. The interception was due to the excess quantity of goods being transported, which exceeded what was covered by the E-way bill. A statement of the driver was recorded, and the department issued an order for the physical verification of the goods. The petitioner, seeking to resolve the issue, requested the release of the vehicle by agreeing to pay the tax and penalty on the excess goods. Despite the request, the department insisted on a detailed inspection and required the petitioner’s presence for verification. As a result, the department issued an order for detention of the goods and vehicle under Section 129(1) of the CGST Act. The petitioner then approached the Kerala High Court by filing a writ petition, seeking directions for the release of the detained goods and vehicle, contingent on the payment of applicable taxes and penalties.

High Court Held

The Hon’ble Kerala High Court held that in the instant case, it was evident that the department had initiated proceedings under Section 129 of the CGST Act. Therefore, the statutory scheme provides for the release of the goods upon compliance with the stipulations specified therein, and thus no specific orders from the Court were necessary. Further, the petitioner had expressed its willingness to pay any applicable penalty or other sums that might be imposed in accordance with the law. In light of the above facts, the Court determined that no additional orders were required to be issued. However, the Court directed the department to release the detained goods and vehicle upon the completion of the physical verification of the goods in the presence of the petitioner, and after payment of any penalty or other demands in accordance with Section 129 of the CGST Act.