Provisional Release of Seized Gold Denied After Initiation of Confiscation Proceedings

Case Details

• Case Name: Ashok Parasuram Uthale v. State GST Department & Ors.

• Court: High Court of Kerala at Ernakulam

• Petition No.: WP(C) No. 5467 of 2025

• Date of Judgment: 20.02.2025

• Relevant Sections:

  • Section 67, CGST/SGST Act, 2017 (Inspection, search, and seizure)

  • Section 130, CGST/SGST Act, 2017 (Confiscation of goods and conveyances)

• Category of Dispute: Confiscation of goods / Seizure / Provisional release

Facts of the Case (Para 2–3)

• The petitioner, a traditional goldsmith from Maharashtra settled in Kerala, was engaged in gold melting, cutting, polishing, and purification.

• On 28.12.2023, officers of the State GST conducted a search under Section 67, seizing 3522.14 grams of gold along with records (Exhibit P1).

• Petitioner contended that since the six-month statutory limit under Section 67(7) had expired, the goods must be released on bond.

• Meanwhile, a show cause notice (Exhibit P3) under Section 130 was issued for confiscation, alleging illegal sale of ₹47.73 crore worth of old gold without GST registration and without invoices.

• Petitioner sought provisional release of gold against bank guarantee/bond.

Questions in Consideration (Para 2, 6, 7)

1. Whether the petitioner is entitled to provisional release of seized gold under Section 67(6) after expiry of the six-month period.

2. Whether initiation of confiscation proceedings under Section 130 bars such provisional release.

Observations of the Court (Para 4–7)

• The Department had obtained an extension order dated 22.06.2024 from the Joint Commissioner under the proviso to Section 67, hence limitation had not expired.

• Once proceedings under Section 130 were initiated by issuance of SCN, the stage for seeking release under Section 67(6) had lapsed.

• Records prima facie showed large-scale transactions (₹47.73 crores) without GST registration, purchase and supply without invoices, justifying confiscation proceedings.

• The petitioner could not claim provisional release under Section 67(6) post-initiation of Section 130 proceedings.

Judgment of the Court (Para 7–8)

• The writ petition was dismissed.

• The Court clarified that the petitioner has liberty to seek release of seized goods under Section 130(2) during confiscation proceedings.

• The confiscation proceedings were upheld as legally initiated, and petitioner was directed to contest them in due course.

Between Fine Lines

This case confirms that:

1. Extension of investigation under Section 67 is valid if ordered by competent authority.

2. Right to provisional release under Section 67(6) is not available once confiscation proceedings under Section 130 begin.

3. Seized goods can be sought for release only under Section 130(2) thereafter.

4. Large unregistered transactions prima facie justify confiscation proceedings.

5. Writ courts will not interfere where statutory remedies are available.

Summary of Referred Cases

(No external case precedents referred in this judgment; only statutory interpretation was relied upon.)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”