Landmark Cases: Section 129 and Section 130

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Please bookmark this small Q&A with landmark cases on Section 129 and Section 130 that challenge both Taxpayers and Tax Professionals. Q1. What is the scope of powers U/s 129 and 130? A1. S.129 and S.130 are independent of each other. S.130 provides for the confiscation of goods

or conveyance is not dependent on or subject to S.129. Both sections are mutually exclusive. Gujarat High Court in Synergy Fertichem Pvt. Ltd. vs State of Gujarat (23-Dec-2019)

Where goods and conveyance were confiscated under Section 130 for realisation of penalty and fine, since liberty was granted under section 107 for same assessee for different period, instant petition was to be disposed of in same manner granting liberty to assessee to challenge

impugned order in term of Section 107. Karnataka High Court in Meghdoot Logistics vs Commercial Tax Officer (Enforcement), Bengaluru (24-May-2023)

Q2. Can Notice be issued U/s 130 without following procedure contemplated U/s 129? A2. SCN issued U/s 130 should follow the procedures as per section 129 (3) and (4). Gujarat High Court in Sri Krishna Traders vs State of Gujarat (2020) 92 ITPJ (G) 611

Q3. Can confiscation be ordered where Statutory Appeal is Pending? A3. When 10% amount is deposited U/s 107(6) of disputed amount, ecovery proceedings for the balance amount of tax and penalty deemed to be stayed in terms of Section 107(7).

Consequently, no proceedings for confiscation of goods as contemplated under Section 130 can be proceeded until disposal of the statutory appeal. Kerala High Court in Smeara Enterprises vs State Tax Officer, Ernakulam (11-Nov-2019)

Q4. Can Notice be issued on mere suspicion? A4. Notice U/s 130 cannot be issued on a mere suspicion as there should be some prima facie material on the basis of which the authority may arrive at the satisfaction that goods are liable to be confiscated. Gujarat High Court in

Anant Jignesh Shah vs Union of India (06-Nov-2020) Q5. Would confiscation proceeding U/s 130 sustainable where there is no intention to evade tax on part of assessee? A5. Proceedings U/s 130 is not sustainable where there is no intention to evade tax. Kerala High Court in

Veer Pratap Singh vs State of Kerala (2021) 97 ITPJ (G) 99 (Ker-HC)\ Veer Pratab Singh vs (2021) 44 GSTL 340 (Ker.) There is confusion over title of this case as one library has mentioned as "Pratap" while other has mentioned as "Pratab". I hope you will find this useful.