Facts of the case:

In this case, the petitioners had sought release of detained goods and vehicles along with stay of confiscation orders issued in Form GST MOV-11 and consequential DRC-07 summary orders. The learned Single Judge, while granting interim relief, directed provisional release of the goods and vehicles subject to payment of 25% of the demand raised in DRC-07 and furnishing bank guarantee for the remaining 75%, relying upon an earlier Division Bench ruling.          

Subsequently, the petitioners filed applications seeking modification of the interim orders on the ground that in other similar matters involving coordinate benches had directed release of goods and conveyances on comparatively lenient terms, namely deposit of 200% of tax payable and execution of indemnity bonds. The petitioners contended that the present cases involved identical facts and that consistency in judicial approach required grant of similar interim protection. It was further argued that the authorities had exceeded the statutory timeline prescribed under Rule 138C of the CGST/KGST Rules by prolonging inspection and verification proceedings for nearly 45 days, thereby depriving the petitioners of their statutory right to seek release under Section 129(1)(a) of the Act.

Issue:

Whether, after passing of confiscation orders under Section 130 of the CGST/KGST Act whereby title in goods and conveyances vests in the Government, the assessee can seek interim release of goods by invoking principles applicable to detention proceedings under Section 129 of the Act.

Held That:

The Court held that the cases relied upon by the petitioners were distinguishable since those matters involved detention proceedings and notices issued under Section 129 of the CGST/KGST Act, whereas the present cases concerned finalized confiscation orders under Section 130 of the Act.

The Court emphasized that Sections 129 and 130 operate in distinct fields. Section 129 deals with detention, seizure, and provisional release of goods and conveyances in transit, whereas Section 130 governs confiscation proceedings. Once an order of confiscation is passed under Section 130(1), title to the goods and conveyance vests absolutely in the Government by virtue of Section 130(5). Consequently, the statutory mechanism available under Section 129 for release of goods no longer survives.

The Court held that after confiscation under Section 130, adjudication relating to confiscation, valuation, tax, penalty, interest, and fine is governed exclusively by Section 130. Therefore, the learned Single Judge was justified in imposing conditions for provisional release and rejecting the prayer for modification of the interim orders. The writ appeals were accordingly dismissed.

Case Name: Sreekrishna Traders, Represented Through Its Proprietor Mr. Manjunath Nayak, Son Of Mohan Das Nayak Versus The State Of Karnataka Through Its Principal Secretary, The Commissioner Of Commercial Taxes Karnataka State Goods And Services Tax, Bangalore And Assistant Commissions Of Commercial Taxes Enforcement, The Joint Commissioner Of Commercial Taxes (Enforcement), Rajendranagar And The Commercial Tax Officer (Enforcement) -03, Davangere dated 07.05.2026