M/S Srinivas Traders vs. The Assistant Commissioner Of State Tax Circle

Held

The Court held that the seizures were vitiated due to the lack of legible and specific reasons provided in the seizure memos, which prevented the petitioner from offering a proper explanation. The Court also found that the authorities had failed to issue a notice under Section 129(3) of the GST Act within the stipulated time frame and had instead initiated proceedings under Section 130. Citing the Supreme Court judgment in Mohinder Singh Gill & Anr vs. The Chief Election Commissioner, the Court ruled that additional reasons could not be supplemented after the impugned order (seizure) had been passed. Consequently, the Court directed the concerned authorities to issue a notice under Section 129(3) within two days, complete the ascertainment of tax within three days thereafter after giving the petitioner an opportunity to be heard, and release the goods accordingly. Proceedings under Section 130 were to be initiated only after the Section 129 process was completed. The Court also emphasized the need for the Commissioner of Commercial Taxes to sensitize officers on proper confiscation procedures.

Facts

The petitioner, M/s Srinivas Traders, filed multiple writ petitions challenging the seizure of its goods while in transit. The petitioner argued that the seizure notices lacked specific reasons, relying on a printed proforma with ticked generic reasons, hindering their ability to provide an explanation. Furthermore, the petitioner contended that the authorities failed to issue a notice under Section 129(3) of the GST Act within seven days of seizure, as required, and instead initiated proceedings under Section 130, which they argued was impermissible. The revenue, represented by the learned Government Pleader, produced documents that did not show any notice issued under Section 129, but rather notices under Section 130. The seizure memos themselves lacked legible reasons for the seizure.

Key Issues

1. Whether the seizure of goods was vitiated due to the lack of specific reasons provided in the seizure notices, thereby violating the petitioner's right to provide an explanation, and if so, which provision of law is relevant? 2. Whether the authorities' failure to issue a notice under Section 129(3) of the GST Act within seven days of seizure, and their subsequent initiation of proceedings under Section 130 of the GST Act, renders the entire process impermissible? Petitioner's arguments: The petitioner argued that the use of a printed proforma with ticked reasons, without providing specific details, prevented them from offering a proper explanation. They also contended that the mandatory seven-day period for issuing a notice under Section 129(3) was violated, and the premature initiation of proceedings under Section 130 was illegal. They relied on the principle that additional reasons cannot be supplemented after an order has been passed, citing Mohinder Singh Gill & Anr vs. The Chief Election Commissioner. Revenue's arguments: The learned Government Pleader for the respondent(s) produced documents showing notices under Section 130 of the GST Act, but no notice under Section 129 of the GST Act was demonstrated. The judgment does not record any specific arguments presented by the revenue to justify the lack of specific reasons or the delay in issuing the Section 129(3) notice.