Case Note & Summary
The dispute arose from the detention of a truck transporting metal scrap by the State Tax Officer on November 22, 2023, under Section 129 of the Central Goods and Services Tax Act, 2017. The petitioner, a company engaged in sale of metal scrap with GST registration since February 13, 2019, challenged the detention and subsequent confiscation notice dated December 2, 2023, issued under Section 130 of the Act via Form GST MOV-10. The core legal issue was whether the respondents could directly invoke Section 130 for confiscation after initiating action under Section 129 without completing the procedure under Section 129. The petitioner argued that such action was illegal, particularly in light of a previous court decision dated December 11, 2025. The respondents' counsel did not dispute that after initiating Section 129 action, they directly proceeded under Section 130. The court analyzed the interplay between Sections 129 and 130, noting that Section 129 provides for seizure and detention during transit, while Section 130 directs confiscation. The court emphasized that the entire procedure under Section 129 must be followed to its logical end before resorting to confiscation under Section 130, unless there is an element of intention to evade tax. The court also discussed the deletion of Section 129(2) via the Finance Act, 2021, which eliminated provisional release under Section 67(6) for goods and conveyance seized under Section 129. The petition was allowed, quashing the impugned notice and subsequent proceedings.
Headnote
A) Tax Law - Goods and Services Tax - Detention and Confiscation Procedure - Central Goods and Services Tax Act, 2017, Sections 129, 130 - Petitioner's goods and conveyance were detained under Section 129, but respondents issued confiscation notice under Section 130 without completing Section 129 procedure - Court held that authorities must complete entire process under Section 129 before resorting to confiscation under Section 130, unless there is element of intention to evade tax - Impugned notice and proceedings quashed as illegal (Paras 5-8). B) Tax Law - Goods and Services Tax - Provisional Release of Goods - Central Goods and Services Tax Act, 2017, Sections 67(6), 129 - After deletion of Section 129(2) via Finance Act, 2021, provisional release under Section 67(6) is no longer available for goods and conveyance seized under Section 129 - Court explained that Section 67(6) only refers to goods, while Section 129 covers both goods and conveyance - Only remedy available is under Section 129 procedure (Paras 7-8). C) Tax Law - Goods and Services Tax - Distinction Between Goods and Conveyance - Central Goods and Services Tax Act, 2017, Sections 2(34), 2(52), 129, 130 - Conveyance is defined separately from goods under the Act and is kept out of scope of goods definition - Conveyance can be seized during transit under Section 129 and confiscated under Section 130 if used with intent to evade tax - Both sections operate within their contours unless bridged by element of intention to evade tax (Paras 7-8).
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Issue of Consideration: Whether the respondents could directly invoke Section 130 of the Central Goods and Services Tax Act, 2017 for confiscation of goods and conveyance after initiating action under Section 129 of the Act without completing the procedure under Section 129
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Final Decision
Petition allowed. Impugned notice dated 02.12.2023 and subsequent proceedings quashed and set aside. Rule made absolute.
