Authorities Must Follow Strict CGST Act Section 129 Procedures When Detaining and Auctioning Goods to Ensure Procedural Fairness

HC found procedural irregularities in goods detention under CGST Act. The court set aside the auction notice, directing authorities to follow proper Section 129 procedures, conduct an inquiry, and potentially release detained goods upon meeting specified conditions while emphasizing the need to establish transaction genuineness.

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Issues involved: Detention of goods without following due process of law u/s 129 of CGST Act, 2017 and auctioning confiscated goods u/s 79 of CGST Act, 2017 during appeal pendency.

Summary:
The petitioner filed a Writ Petition seeking a writ of Mandamus to challenge the detention of goods and a vehicle without following due process of law as per Section 129 of CGST Act, 2017, and the auctioning of confiscated goods under Section 79 of CGST Act, 2017 during the pendency of an appeal. The Respondent Authorities directly invoked Section 130 of CGST Act, 2017 for confiscation without following the procedure of detention under Section 129. The petitioner claimed to have purchased goods from an unregistered dealer with valid documents but faced confiscation proceedings. The Court noted the violation of principles of natural justice in the impugned order and emphasized the need for the petitioner to establish the genuineness of the transaction. Sections 129 and 130 of CGST Act, 2017 were discussed as independent provisions. The Court disposed of the petition, allowing the authorities to initiate proceedings u/s 129 of CGST/APGST Act, 2017, conduct an enquiry, and release the detained goods and vehicle upon certain conditions, setting aside the auction notice.

In the judgment, it was highlighted that the Respondent Authorities did not follow the proper procedure of detention under Section 129 of CGST Act, 2017, and directly resorted to confiscation under Section 130. The Court acknowledged the petitioner's claim of purchasing goods from an unregistered dealer with valid documents but emphasized the need for the petitioner to prove the genuineness of the transaction. The Court emphasized the importance of following principles of natural justice in such proceedings and noted the need for a harmonious reading of Sections 129 and 130 of CGST Act, 2017 as independent provisions. The judgment allowed the authorities to initiate proceedings under Section 129 of CGST/APGST Act, 2017, conduct an enquiry, and release the detained goods and vehicle upon specified conditions, while setting aside the impugned auction notice.

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