Know Your Limits Part 3

[K Balasubramanian]

More number of writs are being preferred in the respective jurisdictional high courts as the taxpayer is at the receiving end and the adjudicating officers as well as the First Appellate Authorities are mostly flouting the norms in passing adverse orders keeping the revenue as the one and only concern. There are several cases almost in all states and union territories across India on Section 129 of the CGST Act 2017.

The basic reason could be the lack of in-depth knowledge on the Sections 129 and 130 and Section 130 is to be applied only in cases where there are no documents/ insufficient documents while transporting the goods and there is an intention to evade the payment of GST. Section 129 is to be applied when there is documents but there are certain issues connected therewith.

As the cases of detention of goods under section 129 all over India were too much on the higher side, CBIC has issued three circulars during 2018 itself with a view to reduce such cases. However, even after six years, it appears that officers posted with the responsibility of interception of vehicles for verification of proper documents seem to invoke section 129 without following the requirements of the section.

Circular Number 41/15/2018 was issued on 13/04/2018 which was amended by circular 49/23/2018 dated 21/06/2018. One more detailed circular was again issued on 14/09/2018 (Circular number 64/38/2018). TMI has also published so many articles on Section 129 being misused by field formations.

The high court of Andhra Pradesh on 07/05/2025had an occasion to deal with one case under section 129 in the matter of Srinivas Traders V Assistant Commissioner of State Tax. The two member bench has passed orders covering five writ petitions wherein the high court observed that there was a need to educate the officers who are under the jurisdictional commissioner.

The observations of the court are that for the goods those were seized under section 129, which require issuance of notice within seven days under sub section 3 was not issued till date of the order. There were no reasons mentioned for seizure and as such petitioner could not present the case.

The court ordered to issue notice under section 129 (3) and to follow the procedures set out in Section 129. The requirement as on date is cases under section 129 to be booked keeping the clarifications issued so far on Section 129. Section 130 is to be used exclusively in cases where the intention to evade payment of tax is evident on record. This shall reduce the AVOIDABLE WRITS in the Jurisdictional high courts. This shall also help the Adjudicating as well First Appellate Authorities from being commented by high courts.

The observations in para 7 are as below: 

7. This is yet another case which requires the Commissioner of Commercial Taxes to sensitize his officers about the manner in which such confiscations are to be carried out. There is every need for the Commissioner of Commercial Taxes, to conduct coaching classes, if necessary, to train his officers to follow the law and the procedural safeguards set out in the law.

It may be concluded that the high court has made very valid observations and by wrong invocation of Section 129, precious time, energy and other resources of not only the taxpayer but also that of tax authorities. Above all, a writ is being entertained by the high court as injustice has been rendered by the tax officers as otherwise, the writs might have been dismissed.