2019 (3) TMI 1718 - HC - GST

Confiscation of goods or conveyance - levy of redemption fine and penalty under section 130 of the Central Goods and Services Act, 2017 - Referring to the impugned notice, it was pointed out that the same seeks to impose penalty, redemption fine and confiscation under section 130 of the Act without initiating any proceedings under section 129 of the Act, which is not permissible in law - HELD THAT - A perusal of the impugned notice reveals that in paragraphs 2, 3 and 4 thereof, there are various blanks which have not been filled in which makes it manifest that the procedure as required under the provisions of the Act as referred have not been followed by the competent authority prior to issuance of the said notice. Issue Notice to the respondents returnable on 3rd April, 2019.

Summary

Issues:
1. Incorrect procedure followed in issuing notice for confiscation of goods and levy of penalty under section 130 of the Central Goods and Services Act, 2017.
2. Failure to comply with the statutory provisions before initiating proceedings under section 130 of the Integrated Goods and Service Tax Act, 2017.
3. Blank spaces in the impugned notice indicating non-compliance with procedural requirements.
4. Noncompliance with relevant statutory provisions leading to the imposition of costs on the respondents.

Analysis:
The judgment delivered by the Gujarat High Court addressed the issues raised by the petitioner regarding the incorrect procedure followed in issuing a notice for confiscation of goods and levy of penalty under section 130 of the Central Goods and Services Act, 2017. The petitioner's advocate highlighted that the concerned officer must first issue a notice under section 129 of the Act, provide an opportunity for a hearing, and only then resort to section 130 of the IGST Act in case of non-compliance. However, the impugned notice directly sought to impose penalties and confiscation without following the necessary steps under section 129, which was deemed impermissible in law.

Furthermore, the court observed that the impugned notice contained several blanks in paragraphs 2, 3, and 4, indicating a failure to fill in essential details required by the provisions of the Act before issuing such a notice. This non-compliance with procedural requirements raised concerns about the validity and legality of the notice issued for confiscation and penalty imposition under section 130 of the Act.

Consequently, the court directed the issuance of a notice to the respondents, returnable on a specified date, requiring them to show cause as to why costs should not be imposed for their noncompliance with the relevant statutory provisions. Additionally, the court clarified that the respondents could release the vehicle and goods by paying the tax amount mentioned in the impugned notice, allowing for direct service for the same.

In conclusion, the judgment highlighted the importance of adhering to the prescribed procedures and statutory provisions before initiating actions such as confiscation and penalty imposition under the GST Acts. The court's decision emphasized the need for procedural compliance and the consequences of failing to follow the legal requirements outlined in the relevant statutes.