Srinivas Traders Vs Assistant Commissioner of State Tax
Date: May 6, 2025
Subject Matter
No Premature Shift to Section 130: GST Authority Must First Conclude Section 129 Proceedings
Summary
In this case, the petitioners challenged the seizure of their goods that occurred while in transit, arguing that the authorities failed to provide sufficient reasoning for the seizure. The reasons given were merely checked on a printed proforma without any detailed explanation, preventing the petitioners from providing their defense.
The petitioners highlighted that the authorities did not issue a notice under Section 129(3) of the GST Act within the required seven-day timeframe following the seizure. Instead, the authorities shifted their approach to potentially initiate proceedings under Section 130, which is not permissible until the process under Section 129 has been completed.
The court noted that the seizure memo lacked clear reasons for the seizure and confirmed the importance of adhering to the procedural requirements established by law. Citing a precedent from the Supreme Court, the court indicated that additional reasons cannot be provided post-facto to support the seizure.
Consequently, the court ordered the authorities to:
- Issue the necessary notice under Section 129(3) within two days.
- Complete the process of tax valuation within three days after issuing the notice.
- Ensure that the petitioners are allowed a proper opportunity to present their case.
The court emphasized that only after this process under Section 129 is completed can proceedings under Section 130 be initiated.
The court also highlighted the need for the Commissioner of Commercial Taxes to ensure that his officers are properly trained to follow the legal procedures for such confiscations, indicating an administrative responsibility to uphold the law. The judgment was to be communicated to the relevant officers for implementation.
FULL TEXT OF THE JUDGMENT/ ORDER OF ANDHRA PRADESH HIGH COURT
1. In all these cases, the goods of the petitioner had been seized, while they were in transit. The petitioner assails these seizures on the ground that no reasons have been given for such seizure. The petitioner contends that the authorities, who had conducted seizures, had given a printed proforma and ticked one of the printed reasons, set out therein, given was without giving any further details. It is contended that in the absence of such details, there is no possibility for the petitioner to give his explanation.
2. Apart from this, the petitioner also contends that the authorities were required to issue a notice, under Section 129(3) of G.S.T Act, within seven days of seizure for calling upon the owner of the goods to participate in an enquiry to ascertain the tax payable on such goods. Thereafter, the authority is required, within seven days of issuance of notice, to complete a process for valuation and determination of tax. In the present case, the goods were seized on 17.04.2025 whereas no notice has been issued till date. The petitioner contends that the authority, instead of completing the process under Section 129 had moved on to take up the process under Section 130 and the same is also impermissible.
3. The documents produced, by the learned Government Pleader do not show any notice being issued under Section 129 of G.S.T Act, notices produced by the learned Government Pleader are notices that are to be issued under Section 130 of G.S.T. Act.
4. A perusal of the seizure memo would also show that no legible reasons for seizure have been set out in the said notices.
5. This Court is not willing to look into the instructions produced by the learned Government Pleader, given by the authorities, to justify such seizure. The law in this regard is well settled by the judgment of the Hon’ble Supreme Court in the case of Mohinder Singh Gill & Anr vs. The Chief Election Commissioner,1that additional reasons cannot be supplemented after the impugned order had been passed.
6. In the circumstances, these Writ Petitions are disposed of with the following directions:
i) The concerned authorities, who had seized the goods of the petitioner, shall issue a notice under Section 129(3) of G.S.T Act within two days from today;
ii) The order ascertaining the documents of the goods and consequent tax, if any, payable on such goods shall be fixed within three days thereafter;
iii) This shall be done after notice and opportunity is being given to the petitioner;
iv) The goods of the petitioner would then be released in terms of Section 129(1) of the G.S.T Act;
v) The proceedings under Section 130 of G.S.T Act shall be initiated only after this process has been completed.
7. This is yet another case which requires the Commissioner of Commercial Taxes to sensitize his officers about the manner in which such confiscations are to be carried out. There is every need for the Commissioner of Commercial Taxes, to conduct coaching classes, if necessary, to train his officers to follow the law and the procedural safeguards set out in the law.
8. A copy of this judgment shall be placed before the Commissioner, Commercial Taxes for his action.
9. The gist of the order shall be informed to the concerned officers by the learned Government Pleader.
As a sequel, miscellaneous petitions, if any, shall stand closed. There shall be no order as to costs.
Notes:
1 1978(1) SCC 405