Invalid Notice for Goods Confiscation and Penalties under CGST Act: Court Emphasizes Procedural Compliance

The High Court found the notice for confiscation of goods and imposition of penalties under section 130 of the Central Goods and Services Act, 2017 to be invalid as it did not follow the required procedure under section 129. The court directed the respondents to explain noncompliance and allowed release of the goods and conveyance upon payment of taxes mentioned in the notice. Emphasizing adherence to statutory procedures, the judgment balanced legal standards with providing an opportunity for resolution.

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Issues:
1. Validity of notice for confiscation of goods or conveyance and levy of penalty under section 130 of the Central Goods and Services Act, 2017 without following the procedure under section 129 of the Act.

Analysis:
The judgment delivered by the High Court focused on the legality of a notice issued for confiscation of goods or conveyance and the imposition of penalties 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 then pass an order before resorting to section 130 of the IGST Act. However, the impugned notice directly sought to impose penalties without following the required procedure under section 129, which was deemed impermissible in law by the petitioner.

Upon examining the impugned notice, the court noted that several essential details were missing in paragraphs 2, 3, and 4, indicating a failure to adhere to the necessary procedure mandated by the Act before issuing such a notice. Consequently, the court directed the respondents to appear and explain why costs should not be imposed for noncompliance with statutory provisions. The court also allowed the respondents to release the vehicle and goods by paying the tax amount mentioned in the notice, clarifying that direct service was permitted in the interim.

In conclusion, the judgment emphasized the importance of following the prescribed procedures under the law, particularly concerning the issuance of notices for confiscation and penalties under the relevant Acts. The court's decision to scrutinize the notice's compliance with statutory requirements and allow the respondents an opportunity to rectify the situation by paying the tax amount showcased a balanced approach to upholding legal standards while providing a chance for resolution.

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