M/S Pvm Traders vs. The State Of Andhra Pradesh

Facts

The petitioner, M/s PVM Traders, filed a writ petition challenging the confiscation order (MOV-11, dated 03.10.2025) and notice of confiscation (MOV-10, dated 29.08.2025) issued by the Assistant Commissioner, IIST, Ananthapuramu-II Circle. The goods, fruits transported from Malappuram, Kerala to Nagpur, Maharashtra, were intercepted on 20.08.2025 at Gooti, Andhra Pradesh, by the Deputy Assistant Commissioner of State Tax. The detention was based on alleged mismatch of documents with the goods, with an order of detention under Section 129(1) of the APGST Act, 2017 (Form GST MOV-06) issued on 23.08.2025. The petitioner contended that the authorities proceeded directly to confiscation under Section 130 without proper procedure under Section 129 and without affording an opportunity of being heard, rendering the proceedings illegal.

Held

The Court allowed the writ petition, setting aside the impugned confiscation order and notice. The decision was based on a coordinate bench's judgment in W.P.No.541 of 2026 and Batch, which held that officers appointed under the APGST Act cannot exercise powers under Section 129 or 130 of the IGST Act in relation to inter-state sales that originate outside the State and culminate outside the State. The reasoning was that such actions by an intermediary state would lead to the appropriation of penalties and fines rightfully due to the originating or destination states, for which there is no provision for reimbursement. The Court agreed with the Gujarat High Court's view in Panchi Traders, emphasizing that confiscation is only permissible for blatant violations with a direct nexus to the intention to evade tax, not for minor aberrations or valuation discrepancies. The Court directed the refund of any amounts paid by the petitioner in compliance with the interim order. The respondents were permitted to forward the records to the proper officer for necessary action.

Key Issues

1. Whether the proper officer, having initiated proceedings under Section 129 of the CGST/APGST Act, can proceed to pass an order of confiscation under Section 130 of the Act without completing the Section 129 proceedings, thereby nullifying the statutory right of the owner to get the goods released? (Section 129, Section 130, CGST Act/APGST Act). The petitioner argued that initiating Section 130 proceedings after Section 129 detention illegally bypassed the owner's right to release goods upon compliance. They also contended that Section 130 mandates an opportunity of being heard for the 'person' interested in the goods and conveyance, which was not provided. The revenue did not present specific arguments on this point, but the court noted its reliance on a coordinate bench's decision.