Srinivas Traders Vs Assistant Commissioner of State Tax and Others (Andhra Pradesh High Court)
In a significant ruling, the Andhra Pradesh High Court has clarified the procedural requirements for the seizure and confiscation of goods under the Goods and Services Tax (GST) Act. The judgment in Srinivas Traders Vs Assistant Commissioner of State Tax and Others emphasizes that proceedings under Section 130 of the GST Act (confiscation and penalty) can only be initiated after the due process outlined in Section 129 (detention, seizure, and release of goods and conveyances in transit) has been fully completed.
The case arose from multiple writ petitions filed by Srinivas Traders, whose goods were seized while in transit. The petitioner challenged these seizures primarily on two grounds: the absence of specific and legible reasons for the seizure and the authorities’ failure to adhere to the statutory timelines and sequence of procedures under the GST Act.
Srinivas Traders contended that the seizure memos issued by the authorities were mere printed proformas, with a general reason ticked off without any further elaboration or details. This lack of specific information, the petitioner argued, rendered it impossible to provide a proper explanation or defense.
Furthermore, the petitioner highlighted a critical procedural lapse: Section 129(3) of the GST Act mandates that a notice be issued within seven days of seizure, calling upon the owner of the goods to participate in an inquiry to ascertain the tax payable. Following this notice, the authority is required to complete the valuation and tax determination process within another seven days. In the present instance, the goods were seized on April 17, 2025, but no notice under Section 129 had been issued by the time of the court’s hearing. Instead, the authorities appeared to have directly moved towards initiating proceedings under Section 130, which deals with confiscation. The petitioner asserted that this direct leap to Section 130 without completing the prerequisites of Section 129 was impermissible under the law.
