I cant' believe they would put them in auction in that condition. How tragic for the horses. If they were seized why aren't they with the local ASPCA getting rehabbed before going to auction or offered for adoption?
"Thin but has put on weight since impounded." Clearly they're feeding it (better than whoever they seized it from was, anyway.) What are they supposed to do, stuff it full of grain and sell a foundered horse, or spend a fortune holding it forever to get it into "suitable" condition? They have a legal responsibility to do what the law requires, which apparently means selling at public auction after a certain point. (That implies it wasn't a private humane society kind of seizure but a criminal case of some kind.)