2025 (6) TMI 1844 - HC - GST

Challenge to detention and confiscation order - no notice was served prior to the order u/s 130 of the Act of 2017 - copy of the order passed u/s 130 was sent or not - HELD THAT - The Petitioner admittedly is the owner of the vehicle (conveyance). The statute prescribes the mode of notice. The notice stated to have been sent to the Petitioner/owner through WhatsApp is not a mode of service contemplated under Section 169 of the Act of 2017. While such a practice was permitted during the COVID-19 pandemic it no longer constitutes a valid mode of issuing notice under the provisions of the Act of 2017 and there is no debate regarding the same. The notice served on the Petitioner before holding that the proceedings under Section 130 are concluded against the Petitioner is not placed on record. There is therefore a serious lacuna in the procedure adopted by the Respondents as far as confiscation of the Petitioner s vehicle is concerned. The Petitioner has consistently taken this stand. The Petitioner has relied upon the decision of the Division Bench of the High Court of Gujarat at Ahmedabad in the case of M/s Lakshay Logistics v. State of Gujarat Order 2021 (1) TMI 99 - GUJARAT HIGH COURT and the decision of the High Court of Madras in the case of M/s. Poomika Infra Developers Erode and others v. State Tax Officer and others Order 2025 (4) TMI 1308 - MADRAS HIGH COURT . In the case of M/s Lakshay Logistics the Division Bench has taken the view that proceedings initiated under Section 130 of the Act of 2017 would be without jurisdiction if notice is not served on the person interested and the owner. The Petitioner s conveyance was seized without there being any notice as contemplated under Section 130 of the Act of 2017. In such circumstances the decision rendered by the Division Bench of the Gujarat High Court in the case of M/s Lakshay Logistics would squarely apply to the case of the Petitioner. In this decision the Division Bench of Gujarat High Court set aside the order passed under Section 130 of the Act solely on the ground of non-service of notice. Conclusion - The proceedings stated to have been concluded against the Petitioner under Section 130 of the Act of 2017 in respect of the vehicle are without jurisdiction for want of valid notice. The matter is remanded to the competent authority for fresh consideration - appeal allowed by way of remand.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court were:

(a) Whether the Petitioner, as the owner of the truck, was duly served with the mandatory notice prior to the issuance of the confiscation order under Section 130 of the Central Goods and Services Tax Act, 2017 (the Act of 2017);

(b) Whether a valid copy of the confiscation order dated 21 December 2024 was served on the Petitioner in accordance with the statutory requirements;

(c) Whether the confiscation proceedings under Section 130 of the Act of 2017 against the Petitioner's vehicle were validly concluded without giving the Petitioner an opportunity of hearing;

(d) Whether the mode of service of notice by WhatsApp, as claimed by the Respondents, is a valid mode of service under the Act of 2017;

(e) The correctness of the dismissal of the writ petition challenging the detention and confiscation of the Petitioner's vehicle.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a) and (b): Validity of service of notice and confiscation order under Section 130 of the Act of 2017

The Court examined the statutory framework governing confiscation under Section 130 of the Act of 2017. Section 130(4) mandates that "no order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard." This provision underscores the necessity of prior notice to the owner before confiscation.

Further, Section 169 prescribes the modes of service of notices, orders, summons, or other communications under the Act. The enumerated modes include personal delivery, registered post, courier, email, publication in newspapers, or affixing at a conspicuous place. The statute also provides that service is deemed complete upon tender, publication, or affixing as prescribed.

The Court noted that the Petitioner, as the registered owner of the truck, was entitled to notice in one of the prescribed modes. The Respondents' assertion that notice was served via WhatsApp was found to be impermissible under Section 169, as WhatsApp is not a recognized mode of service under the Act. Although WhatsApp was allowed as a mode of communication during the COVID-19 pandemic, the Court clarified that such exceptional practice no longer holds validity.

The Respondents failed to place on record any notice served on the Petitioner prior to the confiscation order dated 21 December 2024. The only notice on record was addressed to the consignor, M/s Petroliv Petroleums, not the vehicle owner. The order itself references notice to the driver and consignor, but not to the Petitioner. The Petitioner's consistent assertion that no valid notice was served was accepted by the Court.

Issue (c): Opportunity of hearing and conclusion of confiscation proceedings

Section 130(4) clearly requires an opportunity of hearing before confiscation. The Court observed that the confiscation proceedings were stated to have concluded against the Petitioner by order dated 10 January 2025. However, the Petitioner was not afforded a hearing or an opportunity to contest the confiscation. The Respondents' refusal to grant a hearing or consider provisional release was noted.

The Court emphasized that procedural fairness demands that before confiscation, the owner must be given notice and a chance to be heard. The absence of such procedural safeguards rendered the confiscation order procedurally flawed and without jurisdiction.

Issue (d): Validity of service by WhatsApp

The Court explicitly held that service of notice by WhatsApp is not a valid mode of service under the provisions of the Act of 2017. The statutory modes under Section 169 do not include electronic messaging platforms like WhatsApp. Although such practice was temporarily permitted during the pandemic, it cannot be relied upon as a valid mode of service post-pandemic. Therefore, the Respondents' reliance on WhatsApp communication to establish service was rejected.

Issue (e): Dismissal of writ petition and validity of confiscation proceedings

The Single Judge had dismissed the writ petition on the ground that the Petitioner had received the confiscation order and that the petition was premature. However, the Court found that the Single Judge erred in concluding that the Petitioner had received the order, given the absence of valid service in accordance with the Act. The Court noted that the Petitioner's vehicle remained detained, causing loss of revenue, and that the confiscation order was passed without compliance with statutory procedural requirements.

The Court relied on precedents including the Division Bench decision of the Gujarat High Court in M/s Lakshay Logistics v. State of Gujarat, which held that confiscation proceedings under Section 130 without valid notice to the owner are without jurisdiction. The Court found this principle squarely applicable, reinforcing that procedural compliance is mandatory.

3. SIGNIFICANT HOLDINGS

The Court held:

"Under Section 130(4), no order of confiscation of goods or conveyance shall be issued without giving the person an opportunity of being heard."

"The mode of service prescribed under Section 169 does not include WhatsApp or similar electronic messaging platforms; such modes are not valid for serving notice under the Act of 2017."

"The confiscation proceedings stated to have been concluded against the Petitioner under Section 130 of the Act of 2017 in respect of the vehicle are without jurisdiction for want of valid notice."

"The order of confiscation/detention dated 21 December 2024 and the dismissal of the writ petition are quashed and set aside."

"The matter is remanded to the competent authority for fresh consideration, with directions to issue notice to the Petitioner in accordance with Section 130 and Section 169 of the Act, and to pass orders after giving an opportunity of hearing within three weeks from the Petitioner's appearance."

"This judgment does not go into the merits of the confiscation action and does not affect confiscation of goods not owned by the Petitioner."