Power of confiscation under GST can be invoked only after invoking the power of detention: HC
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- Last Updated on 23 September, 2022
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Case Details: Rajeev Traders v. Union of India - [2022] 142 taxmann.com 420 (Karnataka)
Judiciary and Counsel Details
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- N.S. Sanjay Gowda, J.
- Venkatesh Kumar. S, Adv. for the Petitioner.
- M.B. Kanavi & G.S. Hulmani, Advs. for the Respondent.
Facts of the Case
The goods and vehicle of petitioner were detained on the ground that E-way bill was not generated. However, the goods were accompanied by tax invoice which indicated payment of tax. The proper officer didn’t issue notice demanding tax and penalty but directly initiated confiscation proceedings.
The petitioner filed writ petition against the confiscation proceedings and contended that the proper officer was required to issue a notice specifying the tax and penalty payable and thereafter pass the order for payment of tax and penalty. If the amount would not be paid then the confiscation proceedings to be initiated by the officer.
The Proper Officer submitted that on noticing the intent to evade payment of tax, he decided to invoke his power under Section 130 of CGST Act, 2017 and confiscate the goods and conveyances.
High Court Held
The Honorable High Court observed that as per Section 129, the proper officer shall be bound to release goods and conveyances if penalty prescribed and applicable tax under Section 129 was paid. However, the power of confiscation of detained goods and conveyances shall be available only if applicable tax and penalty was not paid within 14 days despite order being passed in that regard.
Thus, the Court held that the entire procedure adopted by proper officer for converting detention proceedings into confiscatory proceeding, which ultimately led to order of confiscation, was wholly illegal.
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