S.130 CSGT Act | Absence Of Express Reference To Conveyance In Confiscation Order Does Not Exclude It From Confiscation: Kerala High Court

Justice Ziyad Rahman A.A. stated that merely because of the reason that, while ordering the confiscation in the order, the conveyance was not specifically included, it cannot be assumed that, the conveyance of the assessee was exonerated from the confiscation proceedings.

Section 130 of CGST Act provides that any conveyance carrying goods without the cover of any documents or declaration prescribed under the Act shall be liable to confiscation.

The assessee/petitioner is the owner of the truck. According to the assessee, he was approached by M/s. Platinum Trade Link, Palakkad, the consignor, through a local transporter in Kerala for transportation of Arecanuts to Delhi.

Accordingly, the vehicle was arranged for transportation. The assessee's truck was intercepted by the 4th respondent/Assistant State Tax Officer and it was found that the consignment was being made without valid documents. Accordingly, notices were issued to the consignor and also to the assessee through his driver.

Notice of confiscation (Ext.P9) was issued to the driver of the assessee as well as to the assessee herein, asking the assessee as well as the consignor to show cause as to why the confiscation of the goods and the conveyance, shall not be ordered invoking the powers under Sec.130 of the CGST Act.

Later, order (Ext.P10) was passed by the 3rd respondent/The State Tax Officer ordering confiscation. On the basis of Ext.P10, Ext.P11 notice was issued granting opportunity to the assessee to make the payment of penalty in lieu of the auction proceedings in accordance with the provisions of CGST Act.

The main ground on which the challenge is made is that, in Ext.P10 order, there is no specific order of confiscation as far as the conveyance is concerned, as according to the assessee, the said order is in respect of the goods alone and the description of the goods were also mentioned.

The bench observed that “Sec.130 authorises the confiscation of goods and conveyance. Sub.Sec.1(v) of Sec.130 imposes a burden upon the owner of conveyance that, the conveyance was used in contravention of the provisions of the Act, without the knowledge or connivance of him or his agent, or the person in charge of the vehicle. Thus, it is evident that, as the statute imposes a burden upon the owner to prove that the consignment was used without his knowledge or authorisation, the natural consequence of a show cause notice proposing the confiscation of conveyance, if there was no reply from the person concerned or such persons fails to discharge such burden, would be to confirm the proposal in the show cause notice, in case the proceedings under Sec.130 are otherwise found to be sustainable.”

The bench further noted that no finding had been entered into by the 3rd respondent/The State Tax Officer, while finalizing the confiscation proceedings, dealing with any contention with regard to the knowledge of the assessee or lack of knowledge, which obviously was due to the reason that there was no contest from the part of the assessee, in this regard.

“merely because of the reason that, while ordering the confiscation in para 6 of Ext.P10 order, the conveyance was not specifically included, it cannot be assumed that, the conveyance of the petitioner was exonerated from the confiscation proceedings” stated the bench.

The fact that in the operative portion while issuing direction regarding the collection of tax, penalty and fines, in lieu of confiscation, it was specifically ordered that, before release of goods and conveyance, the amounts shall be collected. In such circumstances, the confiscation of conveyance was not ordered as per Ext.P10, added the bench.

In view of the above, the bench dismissed the petition.

Case Title: Asgar Ali v. Union of India

Case Number: WP(C) NO. 27856 OF 2022

Counsel for Petitioner/ Assessee: Ajay Ben Jose, Ajay V. Anand and Laya Mary Joseph

Click Here To Read/Download The Order