Nikhil Ayyappan Vs State of Kerala (Kerala High Court)
In a significant ruling, the Kerala High Court has clarified that goods confiscated under Section 130 of the Goods and Services Tax (GST) Act can be released to the owner during the pendency of an appeal, provided they have not yet been auctioned by the authorities. The judgment, delivered in the case of Nikhil Ayyappan versus the State of Kerala, offers a crucial lifeline to taxpayers facing immediate financial strain due to the seizure of their assets.
The case originated from an incident on October 9, 2024, when a conveyance carrying scrap materials dispatched by petitioner Nikhil Ayyappan was intercepted by the 2nd respondent (GST authorities) at Koonathara, Palakkad. Citing “irregularities,” the authorities initiated proceedings under Section 130 of the GST Act, which deals with the confiscation of goods or conveyances and the imposition of penalties.
These proceedings culminated in a confiscation order (Ext.P8) that determined a substantial fine in lieu of confiscation: Rs. 10,82,539/- under the Central Goods and Services Tax (CGST) Act and an equal amount under the Kerala State Goods and Services Tax (KSGST) Act. The order also stipulated that the confiscated goods could be released to the supplier upon payment of this fine within a period not exceeding three months.
