Background: M/s. Goel Metal filed a writ petition before the Delhi High Court challenging the validity and application of Section 67(6) of the CGST Act, 2017, particularly the provision for provisional release of seized goods. The petitioner also challenged the seizure of unaccounted goods and the subsequent show cause notice dated 10.06.2026 issued under Section 130 of the CGST Act. The petitioner contended that once tax, interest and penalty were discharged under Section 74A(9), continued seizure or confiscation proceedings were without jurisdiction.
Issue: The principal issue before the Court was whether Section 67(6) of the CGST Act could permit only provisional release of seized goods even after payment of applicable tax, interest and penalty under Section 74A(9), and whether the seizure and subsequent proceedings under Sections 122 and 130 were legally sustainable after conclusion of proceedings under Section 74A(9).
Court Decision: The Delhi High Court observed that Section 67 deals with inspection, search and seizure, whereas Section 74A deals with determination of tax not paid, short-paid or erroneously refunded, or input tax credit wrongly availed or utilised, and that the two provisions operate in different and distinct fields. The Court further held that a challenge to the constitutional validity of a statutory provision requires the petitioner to establish infringement of a constitutional mandate. Regarding the impugned show cause notice, the Court permitted the petitioner to file an appropriate reply and seek dropping of the proceedings. With these observations, the writ petition and all pending applications were disposed of. M/s. Goel Metal v. Union of India & Ors., W.P.(C) No. 10996/2026, decided on 05 August 2026, High Court of Delhi.