TaxTMI 
TaxTMI 
TaxTMI 
POWER WITHOUT ACCOUNTABILITY..HOW ENFORCEMENT IS CHOKING THE SPIRIT OF GST
X X X X Extracts X X X X
X X X X Extracts X X X X
....OWER WITHOUT ACCOUNTABILITY..HOW ENFORCEMENT IS CHOKING THE SPIRIT OF GST<br>By: - Sadanand Bulbule<br>Goods and Services Tax - GST<br>Dated:- 14-11-2025<br><br>Eight years have passed since India embraced the Goods and Services Tax (GST) - one of the most transformative tax reforms in our history. Conceived as a "Good and Simple Tax", the GST framework was built on the pillars of trust, transparency, and cooperative federalism. Yet, it is alarming that even after eight years of implementation, the enforcement arm of the tax administration continues to misinterpret and misuse key provisions such as Sections 129 and 130 of the CGST Act. The original legislative intent - to deter willful evasion - is being turned on its head, as officers incr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....easingly invoke these sections to arm-twist genuine taxpayers and criminalize minor procedural lapses. A Law Intended for Deterrence, Not Oppression: Sections 129 and 130 were enacted to deter fraudulent and clandestine movement of goods, not to penalize minor clerical or technical errors. The Hon'ble Supreme Court, in multiple rulings, has categorically stated that enforcement must be guided by proportionality, reasonableness, and bona fide interpretation. In Satyam Shivam Papers Pvt. Ltd. vs. Assistant Commissioner, the Court upheld that mere technical lapses or clerical errors cannot justify detention or confiscation, emphasizing that "a penalty proceeding cannot be sustained where there is no intent to evade tax." Similarly, in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Synergy Fertichem Pvt. Ltd. vs. State of Gujarat the Gujarat High Court - whose observations were later affirmed in spirit by the Supreme Court - clarified that confiscation under Section 130 must be invoked only when there is clear evidence of mens rea (intention to evade). The Court cautioned that these powers cannot be used as instruments of oppression. Despite these categorical pronouncements, field formations in several states continue to invoke Sections 129 and 130 for frivolous reasons - mismatched e-way bills, minor valuation differences, or clerical errors - without even establishing a prima facie case of evasion. Such actions not only violate judicial discipline but also undermine the constitutional guarantees of fairness ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and due process. CBIC's Own Instructions Ignored : The Central Board of Indirect Taxes and Customs (CBIC) has, on multiple occasions, issued instructions to ensure restraint and fairness in enforcement. Notably: Circular No. 41/15/2018-GST dated 13 April 2018: Clearly directed that minor errors in documents should not result in detention or penalty. * Circular No. 49/23/2018-GST dated 21 June 2018: Reiterated that proceedings under Section 129 are warranted only in cases of intentional tax evasion. Circular No. 64/38/2018-GST dated 14 September 2018: Emphasized the need for proportionality in enforcement and protection for bona fide errors. Despite these unambiguous guidelines, many enforcement officers persist in disregarding t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hem, choosing instead to exploit ambiguities to extract penalties and coercive settlements - a practice that not only hurts honest businesses but erodes faith in the rule of law. Selective Vigilance and Misplaced Priorities Even more disheartening is the selective targeting evident in enforcement actions. The so-called "sin goods" - such as tobacco, pan masala, and other high-tax commodities - are widely known for rampant evasion and clandestine trade. Yet, these sectors often escape stringent checks for reasons best known to all. In contrast, organized and compliant taxpayers - who file returns, pay taxes on time, and maintain transparent records - are being subjected to punitive detentions for trivial technical lapses. This misplaced zea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l not only demoralizes the compliant but also gives undue advantage to habitual evaders. Erosion of Cooperative Federalism; The GST Council was designed as a beacon of cooperative federalism, ensuring uniformity and fairness in tax administration across India. However, politically motivated enforcement drives in certain states, sometimes used to project artificial revenue vigilance or justify fiscal gaps arising from freebie-driven governance, have diluted this spirit. The result is a fragmented enforcement landscape where the same law is applied with vastly different interpretations - a situation that goes against the very ethos of "One Nation, One Tax." :Eight Years On - Time for Introspection and Accountability: It is deeply disappoi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nting that after eight years of GST's journey, many enforcement officers have yet to internalize the sensitive and balanced intent of the law. The GST regime was never designed to function on coercion; it was envisioned as a compliance partnership between the State and the taxpayer. The continued misuse of enforcement powers is not merely a legal issue - it is a policy failure that risks alienating the very community that sustains the economy. The Way Forward: Concrete Corrective Measures: To restore balance and integrity to the GST enforcement system, the following steps are imperative: 1. Binding Clarification by CBIC and GST Council: A comprehensive directive reaffirming that detention and confiscation should apply strictly to cases i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvolving intentional evasion, not inadvertent lapses. 2. Accountability of Officers: Introduction of internal review and disciplinary mechanisms against officers who act in contravention of judicial and CBIC instructions. 3. Independent Redressal Mechanism: Establishment of a centralized grievance portal or ombudsman for wrongful detentions, ensuring time-bound resolution. 4. Data-Driven Targeting: Use analytics and risk profiling to focus enforcement on high-risk sectors - especially sin goods - rather than routine or compliant trade. 5. Capacity Building and Sensitization: Mandatory legal and ethical training for enforcement personnel to ensure alignment with the law's spirit and constitutional values. Restoring Faith in the GST Reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ime: The success of GST depends not on fear-based enforcement, but on mutual trust and voluntary compliance. The continued misuse of Sections 129 and 130 sends a dangerous message - that honesty is punished while evasion goes unchecked. It is time for the GST Council and CBIC to act decisively - to restore the balance between enforcement and facilitation, and reaffirm that in a modern democracy, good governance is not about wielding power, but about using it lawfully and justly. If the system continues to alienate honest taxpayers, the "Good and Simple Tax" will remain a hollow slogan, and the credibility of India's most ambitious tax reform will stand severely diminished. Reply By Sadanand Bulbule as = 2025 (11) TMI 1013 - ALLAHABAD H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IGH COURT - Sachin Jain Versus State of U.P. Thru. Prin. Secy. State Taxes Lko. and 3 others Levy of penalty u/s 129(3) of the U.P. Goods and Services Act, 2017 - e-way bill had expired and the petitioner had not renewed the same nor generated a fresh e-way bill. The decision of the Apex Court in Satyam Shivam Papers Private Limited [2022 (1) TMI 954 - SC ORDER], wherein, it has made observations, which clearly indicates that in order to impose a penalty, it must be demonstrated that there has been any intent to evade the tax on the part of the assesses. This Court is of the clear view that the impugned orders dated 30.08.2024 and 09.08.2024 cannot be sustained and are accordingly set aside - Petition allowed. My take: Time & again all....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the High Courts have been quashing the penaly levied under Section 129 despite there being no intent to evade to tax a sheld by the Honble Supreme Court [supra]. The real question is this: Why is the department not taking strict action against officers who are openly violating binding Supreme Court rulings? Why are the honest taxpayers being harassed while the erring officers continue untouched? Is this governance- or just a desperate attempt to boost revenue by twisting the arms of compliant taxpayers to fund political freebies? Let the officers be reminded: They are not doing charity. Their salaries come from the hard-earned money of taxpayers. Yet, instead of upholding the law, they are killing the golden goose through harassm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent, arbitrariness, and greed. Is this what "Next-Gen Tax Reforms" looks like- only on paper and not in practice? It is time for the top administration to wake up. The Supreme Court has laid down the law. It must be implemented-not ignored. Honest taxpayers must be protected, and officers who defy the Apex Court must be held personally accountable. Delay is not just negligence-it is contempt of the law. If the administration is serious about justice, credibility, and the rule of law, let them act now-mercilessly against the officers who misuse power and restore faith in the system. Dated: 17-11-2025 Reply By Sadanand Bulbule as = The High Courts are not meant to function as a cleaning agency for the administrative chaos created by ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reless and mindless GST enforcement. The judicial system cannot be burdened to correct every arbitrary action of officers who act in disregard of law and settled principles. The only meaningful remedy is to impose exemplary and personal costs on such erring officers to ensure accountability, deterrence, and a return to lawful governance. Unless officers are made personally responsible—financially and departmentally—for their deliberate misuse of power, the GST administration will continue to stray from the rule of law. Courts must send a clear message: Abuse of authority is not a harmless procedural error, it is a punishable act Dated: 17-11-2025 Reply By KASTURI SETHI as = Dear Sir Ji, Your voice is the voice of the Trade and In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dustry. Pl. email this article to the CBIC, GST Council and PMO Office. Dated: 17-11-2025 Reply By Sadanand Bulbule as = Sirji Already done. Thanks for your support in the interest of fair administration. “FAKE WORDS CREATE REAL WARS” Dated: 17-11-2025 Reply By Sadanand Bulbule as = It is indeed surprising and problematic to note that authorities are invoking/justifying Section 129(b) of the CGST/SGST Act to levy penalties merely for non-declaration of invoice details in GSTR-1. Section 129 deals specifically with detention and seizure of goods in transit, and the penalties under 129(b) apply only when goods/conveyances are intercepted and found in contravention of documentation requirements, not for return-related lap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ses like GSTR-1 discrepancies. Using a provision meant for in-transit violations to penalise return-filing issues would be beyond the scope of the law, and could indeed appear as an overreach aimed at revenue collection rather than genuine enforcement. If such actions are being taken, it dangerously expands the net of enforcement by: Stretching the interpretation of Section 129(b)- A provision meant for checking goods movement is being applied to a compliance lapse that has its own separate consequences under Sections 37, 122, and 125. It is emphasised here that the increasing misuse of Section 129 by certain field officers - particularly to penalise return-related lapses such as non-reporting of invoices in GSTR-1 - is not o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nly ultra vires the CGST/SGST Act but also creating an image of coercive revenue extraction rather than lawful administration. Section 129 is a narrowly-crafted provision meant exclusively for cases of suspected tax evasion during movement of goods. Immediate supervisory intervention is therefore essential. It is requested that explicit instructions be issued to all formations clarifying that: 1. Section 129 shall not be invoked for GSTR-1 discrepancies, invoice-reporting issues, or any non-transit compliance matters. 2. Disciplinary consequences may follow where officers are found to be invoking 129 to compel payments or intimidate transporters/ECOs without legal basis. 3. All officers must align enforcement strictly with statutory b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oundaries and established judicial principles on proportionality and intent. A clear directive from Commissioners office will not only prevent further misuse of Section 129 but also reinforce the Department's commitment to lawful, transparent, and proportionate enforcement. This is essential for preserving institutional credibility and ensuring that revenue mobilisation remains anchored in legality rather than coercive innovation. Hope the Commissioners shall act swiftly at least now. Otherwise our efforts are like rain on the rock! Dated: 20-11-2025<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....