Case Note & Summary
The Revenue (Union of India and others) filed an intra-court appeal against the order of a learned Single Judge in W.P.No.100849/2022 dated 16.08.2022, which allowed the writ petition filed by the respondent, M/s Rajeev Traders. The respondent claimed to be the owner of areca nuts being transported in seven trucks on 13.09.2021 when the goods were intercepted by the proper officer under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act). After interception, the Revenue issued Form GST MOV-01 (statement of driver), MOV-02 (order for physical verification), and subsequently on 16.09.2021, 17.09.2021, and 18.09.2021, physical verification reports in Form GST MOV-04, Mahazar, and valuation reports were obtained. A voluntary statement of the respondent was recorded under Section 70 of the CGST Act on 27.09.2021, and an order of detention in Form GST MOV-06 was issued under Section 129(1). On the very next day, the Revenue invoked Section 130 of the CGST Act and issued a notice for confiscation of the goods and conveyance. The respondent challenged the notice under Section 130 before the learned Single Judge, who allowed the writ petition holding that proceedings under Section 130 cannot be initiated without first completing the adjudication process under Section 129. The Revenue appealed, arguing that Section 130 is independent of Section 129. The Division Bench dismissed the appeal, holding that Section 129 is a condition precedent for Section 130 and that the Revenue cannot bypass the adjudication process under Section 129(2) by directly issuing a notice under Section 130. The court found no error in the Single Judge's order and upheld it.
Headnote
A) Goods and Services Tax - Detention and Confiscation - Condition Precedent - Section 129 and Section 130 of the Central Goods and Services Tax Act, 2017 - The issue was whether proceedings under Section 130 for confiscation can be initiated without completing adjudication under Section 129 - The court held that Section 129 is a condition precedent for Section 130 and that the Revenue cannot bypass the adjudication process under Section 129(2) by directly issuing a notice under Section 130 - The impugned order of the Single Judge allowing the writ petition was upheld (Paras 3-5).
Issue of Consideration
Whether proceedings under Section 130 of the CGST Act, 2017 for confiscation of goods and conveyance can be initiated without first completing the adjudication process under Section 129 of the Act?
Final Decision
The Division Bench dismissed the appeal, upholding the order of the learned Single Judge. The court held that Section 129 is a condition precedent for Section 130 and that the Revenue cannot initiate proceedings under Section 130 without first completing the adjudication process under Section 129. The impugned order of the Single Judge was affirmed.
Law Points
- Section 129 of CGST Act
- 2017 is a condition precedent for initiation of proceedings under Section 130
- Confiscation under Section 130 cannot be resorted to without completing adjudication under Section 129
- Detention order under Section 129(1) must be followed by adjudication under Section 129(2) before invoking Section 130
