Sreekrishna Traders v. The State of Karnataka

Order No.ACCT/ENF/HVR/VIG-15/2025-26 in Form GST MOV-11 dated 09.10.2025 (Annexure-B) and Summary Order No.ZD2910250237489 in GST DRC-07 in dated 09.10.2025 (Annexure-C) passed by the Respondent No.3." In WP.No.33220/2025 : "Pending disposal of the above writ petition, it is prayed that this Hon'ble Court may be pleased to direct the Respondents to release the goods and vehicle and stay the operation of the Confiscation Order No.CTO/ENF-03/DVG/VIG-

05/2025-26 in Form GST MOV-11 dated

10.10.2025 (Annexure-B) and Impugned Summary Order No.ZD291025029724D in GST DRC-07 in dated 10.10.2025 (Annexure-C) passed by the Respondent No.4."

¶11On careful perusal of the above interim prayer, it is clear that the order challenged by the petitioners are the order of confiscation under Section 130 of the Act, whereas the order passed in identical matters in WP.Nos.37627/2025, 37643/2025, 37805/2025 and 37841/2025 by the learned Single Judge are in respect of the order of detention and as well as notice for confiscation of goods and conveyance which comes within the ambit of Section 129 of the Act. In such circumstances, in similar circumstances, the Co-ordinate Bench of this Court in W.A.No.1232/2025 c/w. W.A.No.1212/2025 & other matters, held in paragraph 7.1 to 7.6 as under:

7.1 The only question that arises for consideration in these writ appeals is whether, after issuance of an order under Section 130 of the Act, thereby vesting title to the goods and the conveyance in the State Government, it is permissible to challenge only the order passed under Section 129 of the Act in a writ petition, and whether the learned Single Judge was justified in directing release of the detained and confiscated goods subject to payment of a specified percentage of the value of the goods.

7.2 Our answer to the above issues is in the 'negative' for the reasons below.

7.3 Section 129 of the Act empowers the concerned authorities to detain, seize and release goods and conveyances in transit. The provision enables the proper officer to issue a payment of such penalty. Section 129 also contemplates affording an opportunity to the assessee before passing any order. Sub-section (6) provides for release of the conveyance upon payment by the transporter of the penalty quantified under sub-section (3). Sub-section (5) stipulates that upon payment of the amounts specified under sub-section

(3), the proceedings in respect of such detention or seizure shall stand concluded.

7.4 Section 130, on the other hand, empowers the proper officer to order confiscation of goods or conveyance and to levy penalty. Once an order of confiscation is passed under Section 130(1), in terms of sub-section (5), the title to the goods and the conveyance shall vest in the Government.

7.5 On a conjoint reading of Sections 129 and 130 of the Act, it is evident that once an order under Section 130 is passed and the title to the goods and the conveyance vests in the Government, the mechanism contemplated under Section 129 ceases to be available. Thereafter, the adjudication with regard to confiscation, valuation, and determination of tax, penalty, interest and fine is governed exclusively by the provisions of Section 130 of the Act.

7.6 In that view of the matter, as on the date of the order passed by the learned Single Judge, an order under Section 130 of the Act had already been made and the goods had vested in the Government. In such circumstances, the learned Single Judge was not justified in entertaining the writ petition challenging the order passed under Section 129 of the Act and in directing release of the goods upon payment of a specified percentage of the amount.

¶12On careful reading of the provisions in Sections 129 and 130 of the CGST/KGST Act and the law laid down by the Co-ordinate Bench of this Court in the aforesaid writ appeal, we are of the considered view that the impugned interim orders dated 05.12.2025 and 13.11.2025 passed by the learned Single Judge by imposing the conditions is in accordance with law and do not require any modification as sought for in I.A.No.1/2026. Accordingly, the writ appeals fail and are liable to be dismissed. In the result, both the appeals are dismissed. SD/- (SACHIN SHANKAR MAGADUM) JUDGE SD/- (RAJESH RAI K) JUDGE PKS

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