2025 (5) TMI 1675 - HC - GST

Goods Seizure Invalidated: Authorities Must Issue Proper Notice, Conduct Fair Valuation, and Respect Procedural Safeguards

AP HC ruled in favor of petitioner challenging goods seizure. Court found seizure notices defective, lacking specific reasons and mandatory Section 129(3) ... Seizure of goods in transit - lack of legible reasons for seizure - Notice not served u/s 129 instead moved on to take up the process under Section 130 - relying instead on a printed proforma without detailed explanation - procedural compliance for confiscations - HELD THAT- 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, [1977 (12) TMI 138 - SUPREME COURT] that additional reasons cannot be supplemented after the impugned order had been passed. Thus, 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. 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. 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. The Andhra Pradesh High Court, per Justice R. Raghunandan Rao, addressed multiple writ petitions challenging the seizure of the petitioner's goods in transit. The petitioner contended that the seizure notices lacked specific reasons, relying instead on a printed proforma without detailed explanation, thereby denying the petitioner an opportunity for explanation. Further, the petitioner argued that the authorities failed to issue a mandatory notice under Section 129(3) of the GST Act within seven days of seizure, required to initiate an enquiry into tax payable, and prematurely proceeded under Section 130, which was impermissible.The Court observed that no notice under Section 129 was produced; only Section 130 notices were shown. The seizure memos lacked legible reasons for seizure. Citing Mohinder Singh Gill & Anr v. The Chief Election Commissioner, 1978(1) SCC 405, the Court held that 'additional reasons cannot be supplemented after the impugned order had been passed.'Accordingly, the Court directed: (i) issuance of notice under Section 129(3) within two days; (ii) completion of the valuation and tax determination process within three days thereafter, with notice and opportunity to the petitioner; (iii) release of goods as per Section 129(1); and (iv) initiation of proceedings under Section 130 only after completing the Section 129 process.The Court emphasized the need for the Commissioner of Commercial Taxes to sensitize and train officers on proper procedural compliance in confiscations. The judgment is to be communicated to the Commissioner and concerned officers. No costs were awarded.