Release of Seized Gold against Security Pending GST Tribunal Constitution

Case Title: Blue Bell Jewellers v. Senior Enforcement Officer, SGST Dept. & connected matter Joint Commissioner of State Tax (I&E) v. Blue Bell Jewellers
Court: High Court of Kerala at Ernakulam
Petition Numbers: WP(C) No. 20073 of 2024 & WP(C) No. 25651 of 2024
Date of Judgment: 01.10.2024
Category of Dispute: Confiscation & Fine in lieu of Confiscation (Section 130 CGST/SGST Act)
Relevant Sections: Section 130 (confiscation), Section 107 (appeal), Section 112 (appeal to Appellate Tribunal), CGST/SGST Acts.

Facts of the Case (Para 1–2, 4–6)

1. Blue Bell Jewellers (petitioner in WP(C) 20073/2024) was subjected to seizure of 557.770 grams of gold ornaments by the SGST Enforcement Squad. The original authority imposed fine in lieu of confiscation amounting to ₹31,22,100/- under Section 130 of the SGST Act.

2. On appeal, the Appellate Authority (vide order dated 06.03.2024) reduced the fine to ₹6,24,420/-.

3. Blue Bell Jewellers challenged the imposition of fine even at the reduced amount, while the Revenue (WP(C) 25651/2024) challenged the reduction, contending that the appellate authority had wrongly interfered with the confiscation order.

4. Since the Appellate Tribunal under Section 112 was not constituted, both sides approached the High Court.

Question(s) in Consideration (Para 2–4)

• Whether the seized gold could be released to the petitioner pending constitution of the Appellate Tribunal.

• Whether the High Court should adjudicate the correctness of the Appellate Authority’s order reducing fine.

Observations of the Court (Para 2–4, 7)

1. The Court noted that in Velayudhan Gold LLP v. Intelligence Officer [WP(C) 4244/2024, decided 24.07.2024], a similar situation had arisen where gold stock-in-trade was seized, and the Court permitted release on security till the Tribunal was constituted.

2. The Court reiterated that since confiscated goods can be released on payment of fine and considering that gold forms stock-in-trade, such goods should not remain indefinitely under seizure.

3. The Court declined to examine the merits of the fine/confiscation at this stage, leaving it open to the Appellate Tribunal to decide once constituted.

Judgment of the Court (Para 4–7)

• The writ petitions were disposed of with the following directions:

  1. The seized gold shall be released to Blue Bell Jewellers upon execution of bonds before the Senior Enforcement Officer, Palakkad.

  2. Property of the petitioner’s father (6 Ares & 7 Sq. mtrs. at Chalakkudy) shall be provided as security; the owner must file an affidavit not to alienate/encumber until Tribunal proceedings conclude.

  3. Since original title deeds are with the bank, attested copies from the bank must be produced.

  4. Appeals may be filed before the Tribunal once constituted.

  5. The petitioner must first pay the penalty fixed by the Appellate Authority before seeking release of gold.

  6. The Tribunal shall decide the matter on merits without being influenced by this judgment.

Between Fine Lines (Simplified Summary)

• Gold seized under GST confiscation proceedings can be released on security until the Tribunal is set up.

• The High Court did not decide on the correctness of the fine but ensured protection of business assets.

• The petitioner must provide immovable property security and pay the appellate penalty for release.

• Both sides retain the right to appeal once the Tribunal is functional.

• This ruling balances business continuity with safeguarding revenue interest.

Summary of Referred Cases

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