Detention of goods without an order cannot be deemed legal under the Central Goods and Service Tax Act; procedural correctness must be established before final ruling.

JUDGMENT Devan Ramachandran, J.

Even though we are considering this matter for admission, we have heard it in full detail and the learned counsel on both sides made elaborate submissions. We also have the consent of both sides that we can dispose of this Appeal at this stage itself.

2. The Enforcement Officer, along with the Assistant Tax Officer of the 3^rd appellant – State Goods and Service Tax Department, are in Appeal; and they assail the judgment of the learned Single Judge of this Court in WP(C)No.881/2026.

3. The presented facts, compendiously, are to the effect that the consignment of the respondent was intercepted by the 2^nd appellant on 25.11.2025 and a suspicion was entered that the goods covered by the documents were not properly accounted for, thus leading to an assumption of evasion of tax. It is admitted that, thereafter, a notice under Form MOV-10, as per the Central Goods and Service Tax Act, 2017 (hereinafter referred to as ‘the Act’ for short) was issued, informing the respondent of the intent of the Authority to confiscate the goods, or to impose confiscation fine and penalty in lieu of it. It is stated that the respondent responded to this, saying that they are willing to pay the penalty and confiscation tax, but solely to obtain a release of the goods; intending to challenge the proceedings as per law.

4. Sri.M.Rafeq – learned Special Government Pleader for the appellants, argued that, when the Notice in Form MOV-10 had already been issued to the respondent and when they had conceded to make payment of the confiscation fine and penalty, normally, the proceedings ought to be allowed to have been completed because, it is only thereafter can the Authority decide whether to accept the said proposal or otherwise. He contended that, however, while such proceedings are still pending, the learned Single Judge has ordered release of the consignment to the respondent, on furnishing a simple bond; and further finding that its detention is illegal and unlawful. He asserted that both the finding and direction afore are illegal and unlawful.

5. In response, the learned counsel for the respondent –

Sri.Jikku Seban George, argued that the detention of the articles by the Authorities without an order of detention, as required under Section 129 of the ‘Act’, is illegal and unlawful; further pointing out that, under Section 130 – even assuming that this is the provision invoked, going by the factum of issuance of MOV-10 Notice to his client – no detention is possible in the manner as has been done. His specific contention was that, before further action under Section 130 of the ‘Act’ can be taken forward, the goods will have to be released, unless its detention is authorised by a competent order. He predicated that, without such an order, his client has been left without any remedy to challenge the detention.

6. We see from the impugned judgment that the learned Single Judge has held that the detention of the goods without proper order of detention, is illegal and has consequently permitted its release in favour of the respondent on furnishing a simple bond. It is pertinent that the learned Single Judge has relied upon a particular fact in arriving at such conclusion, namely, that, in furtherance of the proposal for confiscation as indicated in Form MOV-10 received by the respondent, he has already paid an amount of Rs.8,92,053/- which is the determined confiscation fine and penalty; to then hold that therefore, further detention of the goods with the Authority is impermissible.

7. It is ineluctable from th