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of <h1>Court Restores Show Cause Notice for Tax Levy with Hearing Opportunity</h1> <h3>M.S. Meghdoot Logistics Versus Commercial Tax Officer (Enforcement-09)</h3> M.S. Meghdoot Logistics Versus Commercial Tax Officer (Enforcement-09) - [2021] 89 G S.T.R. 403 (Kar), 2021 (47) G.S.T.L. 113 (Kar.) Issues Involved:1. Jurisdiction and validity of the Show Cause Notice dated 07.09.2020.2. Applicability and interpretation of Sections 129 and 130 of the Central Goods and Services Tax Act, 2017.3. Procedural requirements for detention, seizure, and confiscation of goods and conveyance under the Act.4. The interplay between Section 129 and Section 130 of the Act.Detailed Analysis:1. Jurisdiction and Validity of the Show Cause Notice dated 07.09.2020:The petitioner challenged the Show Cause Notice dated 07.09.2020, arguing it was issued without jurisdiction and was an arbitrary exercise of power under the statute. The petitioner contended that the respondent did not pass any orders on the earlier Show Cause Notice dated 25.08.2020, which was required before issuing a new notice under Section 130 of the Act. The petitioner relied on the decision in *Shree Enterprises v. The Commercial Tax Officer*, asserting that the respondent must first conclude the proceedings under Section 129 before initiating proceedings under Section 130.2. Applicability and Interpretation of Sections 129 and 130 of the Act:The petitioner argued that Section 129 deals with the detention, seizure, and release of goods and conveyance in transit, while Section 130 deals with the confiscation of goods or conveyance. The petitioner contended that both sections are mutually exclusive and that proceedings under Section 130 could only be initiated if there was a failure to pay the tax and penalty determined under Section 129 within the statutory period. The respondent, however, argued that both sections are independent and that proceedings under Section 130 could be initiated even if the proceedings under Section 129 were ongoing.3. Procedural Requirements for Detention, Seizure, and Confiscation:The respondent detained the petitioner's conveyance and seized the goods, citing reasons such as the need for further verification of the genuineness of the goods and documents, physical verification to ascertain the origin and source of goods, and confirmation of the existence of the Consignor and Consignee. The petitioner responded by asserting that all necessary documents were in order and that there was no contravention of law or evasion of taxes. The respondent then issued the Show Cause Notice dated 25.08.2020, proposing a levy of tax and penalty, followed by the impugned notice dated 07.09.2020 under Section 130, alleging connivance between the petitioner, the Consignor, and the Consignee to evade taxes.4. The Interplay Between Section 129 and Section 130 of the Act:The court examined whether the authorities could initiate proceedings under Section 130 independently of Section 129. The court referred to the decision in *Synergy Fertichem Pvt. Ltd. v. State of Gujarat*, which held that Sections 129 and 130 are mutually exclusive and independent. The court concluded that the authorities could initiate proceedings under Section 130 if there was sufficient evidence of intent to evade tax, even if the proceedings under Section 129 were ongoing. The court held that the proper officer must determine the applicable tax and penalty under Section 129 while simultaneously initiating proceedings for confiscation under Section 130 if there was an attempt to evade tax.Conclusion:The court disposed of the writ petition by restoring the Show Cause Notice dated 25.08.2020 and directing the respondent to decide on the proposed levy of tax, penalty, and cess with a reasonable opportunity of hearing to the petitioner. The respondent was also directed to contemporaneously decide on the impugned Show Cause Notice dated 07.09.2020 in accordance with the provisions of Section 130 of the Act. The court emphasized that the proper officer must determine the applicable tax and penalty under Section 129 while simultaneously initiating proceedings for confiscation under Section 130 if there was an attempt to evade tax.
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