M/S R.R. Enterprises vs. State Of Punjab & Others

Held

The Court held that the confiscation order passed under Section 130 of the Punjab Goods and Services Tax Act, 2017, was premature. The Court noted that no order levying tax and penalty under Section 129 of the Act had been passed, which is a prerequisite for invoking Section 130 in such circumstances. The Court accepted the submission made by the State's counsel. The Court directed that the order of confiscation of the goods under Section 130 be withdrawn. The petitioner was directed to appear before the Proper Officer on October 12, 2018, to deposit the amount of tax and penalty, if levied in terms of Section 129. The State was granted liberty to proceed further in accordance with law if the petitioner failed to deposit the determined amount. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s R. R. Enterprises, approached the High Court of Punjab & Haryana seeking the release of detained goods. The goods were detained on August 24, 2018, due to allegations of not being accompanied by proper documents. Subsequently, an order of confiscation under Section 130 of the Punjab Goods and Services Tax Act, 2017, was served on the petitioner. It was undisputed that no order levying tax and penalty under Section 129 of the Act had been passed, despite a notice being issued after detention. The State's counsel, on instructions, submitted that proceedings under Section 129 would be concluded after a hearing, and the confiscation order would be withdrawn, with liberty to invoke Section 130 if the petitioner failed to deposit the tax and penalty.

Key Issues

1. Whether the confiscation of goods under Section 130 of the Punjab Goods and Services Tax Act, 2017, is valid when no order levying tax and penalty under Section 129 of the Act has been passed. Petitioner's contention: The petitioner argued that the confiscation order was premature and illegal as the proceedings under Section 129, which determine the tax and penalty, had not been concluded. The petitioner sought the release of the detained goods. Revenue's contention: The State submitted that the proceedings under Section 129 would be concluded after affording a hearing to the petitioner. They proposed that the confiscation order under Section 130 be treated as withdrawn, with liberty to invoke Section 130 again if the petitioner failed to deposit the tax and penalty determined under Section 129. The State relied on the procedure outlined in the Act for detention, seizure, and release of goods.