CONFISCATION OF GOODS OR CONVEYANCE: NEVER BOTH UNDER SECTION 130

1. The regime of the Goods and Services Tax was built upon the solemn promise of administrative predictability, proportionality, and the eradication of executive high-handedness. Yet, on the ground, transit enforcement has increasingly devolved into a domain of mechanical hyper-zeal. Nowhere is this administrative drift more visible than in the routine, template-driven issuance of notices in FORM GST MOV-10, where field officers indiscriminately invoke Section 130 of the CGST Act, 2017.

2. A perusal of contemporary enforcement notices reveals a standard modus operandi: upon intercepting a conveyance for procedural or documentation discrepancies under Section 129, proper officers abruptly jump to Section 130. In doing so, they routinely propose the simultaneous confiscation of both the goods and the conveyance, while demanding cumulative penalties and redemption fines under both heads. This double-barrelled approach represents a fundamental statutory misinterpretation and an unequivocal abuse of sovereign power.

3. The foundational error committed by administrative authorities lies in their refusal to read the text of Section 130 with statutory precision. The very title of the provision reads explicitly: "Confiscation of goods OR conveyances and levy of penalty."

4. The deliberate legislative employment of the disjunctive conjunction "OR" in the section heading, as well as in the operative clause of Section 130(1)-which mandates that "all such goods OR conveyances shall be liable to confiscation"-is neither accidental nor ornamental.

5. The legal significance of Parliament's deliberate choice between "OR" and "AND" was authoritatively cemented by the Hon'ble Supreme Court in its landmark judgment in Chief Commissioner of Central Goods and Service Tax & Ors. Versus M/s Safari Retreats Private Ltd. & Ors. - 2024 (10) TMI 286 - Supreme Court. In Safari Retreats, while deciphering the statutory architecture of Section 17(5)(d), the Hon'ble Apex Court established bedrock principles of statutory interpretation that apply with absolute force to Section 130:

A. The Hon'ble Supreme Court held that the legislature's choice of a disjunctive conjunction ("OR") versus a conjunctive one ("AND") is conscious and binding. Executive authorities possess zero jurisdictional sanction to substitute "OR" with "AND" to artificially broaden the scope of a restrictive or penal provision.

B .Provisions that restrict rights, impose penalties, or divest private property must be strictly construed according to their plain arrangement. The executive cannot rewrite statutory grammar to expand state power or multiply tax burdens beyond Parliament's explicit mandate.

Applying the ratio of Safari Retreats to Section 130 reveals the statutory boundaries engineered by Parliament:

C. Sub-clauses (i) through (iv) of Section 130(1) address acts attributable directly to the owner or supplier of the goods-such as supplying goods in contravention of rules with intent to evade tax, failing to account for goods, or operating without registration. In these circumstances, it is the goods alone that are the primary subject liable to confiscation.

D. Sub-clause (v) of Section 130(1) establishes an entirely separate, standalone ground targeting the vehicle itself: using a conveyance as a means of transport in contravention of the Act. Crucially, the legislature built a specific statutory safeguard directly into this clause: the conveyance cannot be confiscated if the owner proves it was used without their knowledge, connivance, or that of their agent.

6. By proposing the simultaneous confiscation of both the cargo and the vehicle as a matter of routine course, field authorities convert Parliament's disjunctive "OR" into a conjunctive "AND". In doing so, they treat two completely distinct legal entities-the owner of the goods and the owner of the conveyance-as a single consolidated offender, committing a fatal jurisdictional error. This practice completely bypasses the third proviso under Section 130(2), which explicitly caps the redemption fine for a hired conveyance to the tax payable on the goods, further reinforcing that the liability of the conveyance is strictly independent, disjunctive, and secondary.

7. Confiscation under Section 130 is the most draconian civil punishment in tax jurisprudence. Unlike detention under Section 129-which is a provisional, coercive remedy to secure tax and penalty-confiscation under Section 130 results in the absolute divestment of private property, vesting title directly and permanently in the government under Section 130(5). Because confiscation is an extraordinary measure, the Hon'ble Supreme Court and various High Courts have consistently held that Section 130 cannot be invoked as a routine substitute for assessment or transit detention:

A. Requirement of Explicit Mens Rea (Additional Commissioner Grade-2 & Anr. Versus M/s. Dayal Product. - 2025 (9) TMI 602 - SC Order): The Hon'ble Apex Court has clarified that Section 130 requires the revenue to establish a deliberate, positive act driven by a specific intention to evade payment of tax. A mere technical omission, missing e-way bill, or typographical defect during transit cannot automatically trigger confiscation.

B. Proportionality and Protection Against Administrative Overreach (Assistant Commissioner (ST) & Ors. Versus M/s. Satyam Shivam Papers Pvt. Limited & Anr. - 2022 (1) TMI 954 - SC Order ): The Hon'ble Supreme Court deprecated the aggressive use of penal transit provisions for procedural errors, reinforcing that state authorities cannot act arbitrarily or turn transit checking into a revenue-generating expedition.

C. High Court Standards on Transit Confiscation (SYNERGY FERTICHEM PVT. LTD Versus STATE OF GUJARAT - 2019 (12) TMI 1213 - GUJARAT HIGH COURT): While authorities frequently quote Synergy Fertichem Pvt Ltd. to justify moving from Section 129 to Section 130, the courts have emphasized that Synergy Fertichem itself strictly conditions the invocation of Section 130 on independent, cogent evidence proving an intentional attempt to evade tax. An officer cannot simply execute a copy-paste recital in MOV-10 alleging "intent to evade" without placing concrete evidence on record.

8. When proper officers issue notices in FORM GST MOV-10 levying separate, overlapping penalties under Section 122 alongside dual redemption fines under Section 130 on both the cargo and the vehicle, they commit a fatal jurisdictional error. They conflate provisional detention with ultimate confiscation, ignore the doctrine of strict literal interpretation articulated in Safari Retreats, and dismantle the disjunctive architecture designed by Parliament.

9. Section 130 was envisioned as an exceptional remedy reserved strictly for deliberate, proven tax fraud. Enforcement officers must be held to the precise syntax of the law: where grounds for confiscation are legitimately established, the authority must adjudicate liability against either the goods or the conveyance based on actual culpability, but never mechanically against both. Until field formations align their enforcement practices with this statutory boundary, notices issued in Form GST MOV-10 that indiscriminately target both cargo and conveyance remain legally unsustainable and vulnerable to judicial intervention.

10. To counter this systematic administrative overreach under Section 130 and protect taxpayers from arbitrary dual-action notices in FORM GST MOV-10, taxpayers and legal practitioners can employ the following structured remedies:

A. Raise a preliminary objection that the MOV-10 notice is legally invalid if it relies on template recitals of "intent to evade" without adducing independent, concrete evidence of deliberate tax fraud. Cite Dayal Products and post-2022 statutory amendments to establish that Section 129 detention cannot be mechanically converted into Section 130 confiscation.

B. Plead the Safari Retreats Disjunctive Ratio ("OR" vs. "AND"): Formally object to the dual proposal of confiscating both cargo and vehicle. Citing Safari Retreats, assert that the conjunction "OR" in Section 130(1) enforces alternative subject-matter jurisdiction. If the alleged deficiency pertains to cargo documentation, the remedy lies against the goods alone; the conveyance can only be brought under Section 130(1)(v) upon proving specific connivance or direct knowledge of the vehicle owner.

C. Where field authorities reject statutory replies and issue an ex-parte or mechanical order in FORM GST MOV-11, file a Writ Petition under Article 226 of the Constitution. High Courts consistently quash MOV-10/ MOV-11 orders issued without satisfying threshold jurisdictional requirements, bypassing statutory remedies when actions are manifestly arbitrary or without jurisdiction.

D. Provisional Release Pending Adjudication: Seek interim directions for the provisional release of the conveyance/goods upon execution of a bond or furnishing bank guarantee under Section 67(6) read with applicable rules, preventing indefinite detention of capital during pending litigation.

11. Transporters must explicitly submit proof of bona fide carriage (e.g., standard e-way bill verification, driver records) establishing zero knowledge or connivance regarding the nature of goods. Under the third proviso to Section 130(2), the redemption fine on a hired conveyance cannot exceed the tax payable on the goods, barring authorities from imposing full vehicle confiscation or arbitrary market-value fines.

12. Citing the Supreme Court's mandate in Satyam Shivam Papers, pray for exemplary costs against officers who act with reckless disregard for statutory boundaries, ensuring administrative accountability for unauthorized detentions, besides relying on CBIC Circular No. 64/38/2018-GST: