In W.P. No. 101517 of 2023 (T-RES)-KAR HC- Sec.130 of CGST Act is Code by itself, which provides for confiscation of goods & conveyance; Under certain eventualities, confiscated material vests with Govt and same can be auctioned: Karnataka HC
Justice M.I.Arun [21-03-2023]

Read Order: M/S. SHREE PAMPAPATHY ENTERPRISES v. UNION OF INDIA 

Tulip Kanth 

Dharwad, March 29, 2023: The Karnataka High Court has allowed a Writ Petition challenging the order of confiscation of goods, conveyance and demand of penalty passed under Section 130 of CGST Act, 2017.

Referring to provisions of the Act, the Single-Judge Bench of Justice M.I.Arun said, “...what is contemplated in Section 130(4) is “an opportunity of being heard” and not a mere opportunity of filing objections to the action contemplated.”

The petitioner being owner of certain goods was transporting the same from Mundgod, Uttara Kannada to Ongloe Prakasham, Andhra Pradesh. The goods and conveyance were seized near Ananthpur Bypass Toll Plaza and proceedings were initiated. 

Thereafter the impugned order had been passed under the provisions of Section 130 of the CGST Act.

The petitioner had challenged this Order mainly on the ground that the same was passed without affording proper opportunity of hearing to the petitioner and the same was in violation of Section 130(4) and in violation of the principles of natural justice.

From the respondent’s side, it was contended that the petitioner had filed a written reply and the same had been considered before passing the order. It was also argued that if the petitioner was aggrieved, he had an alternative efficacious remedy to file an appeal under Section 107.

The Bench took note of the fact that the impugned order revealed that an opportunity was given to the petitioner to file his reply and he had filed his reply, which had been considered and rejected by the respondent.

Placing reliance upon Section 130(4), the Bench said, “Section 130 of the CGST Act is a code by itself, which provides for confiscating the goods and the conveyance and under certain eventualities the confiscated material vests with the Government and the same can be auctioned.”

Further noting that when such harsh measures are initiated against any person, it is very essential that a proper opportunity of hearing has to be given, the Bench held that the petitioner had been granted an opportunity to file his objections but not an opportunity of hearing. 

Hence, on this point, the Bench allowed the writ petition by setting aside the impugned order and remanding the matter back to the respondent to give an opportunity of hearing to the petitioner and thereafter pass appropriate order.