Facts of the Case

The petitioner, M/s Jupiter Express Carrier (P) Ltd., filed a writ petition before the Karnataka High Court challenging the constitutional validity of Sections 129 and 130 of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017, along with Clause (i) of Circular No. 41/15/2018-GST dated 13.04.2018.

The petitioner also sought quashing of the confiscation order passed by the Commercial Tax Officer under Section 130 of the CGST/KGST Acts relating to its vehicle. During the pendency of the proceedings, the High Court directed the petitioner to file an affidavit stating that the vehicle had been used without its knowledge or connivance with the concerned logistics operator. Pursuant to the Court's interim direction, the authorities released the vehicle.

Issues Involved

  1. Whether Sections 129 and 130 of the CGST Act and KGST Act were unconstitutional and violative of Articles 14, 19 and 21 of the Constitution of India.
  2. Whether Clause (i) of Circular No. 41/15/2018-GST was liable to be declared illegal.
  3. Whether the confiscation order passed under Section 130 deserved to be quashed.
  4. Whether any further adjudication was required after the authorities released the confiscated vehicle.

Petitioner's Arguments

  • The petitioner contended that Sections 129 and 130 of the CGST/KGST Acts were unconstitutional and violated Articles 14, 19 and 21 of the Constitution.
  • It challenged the legality of Clause (i) of Circular No. 41/15/2018-GST dated 13.04.2018.
  • The petitioner argued that the confiscation order issued by the Commercial Tax Officer under Section 130 was illegal and liable to be set aside.
  • It sought release of the confiscated vehicle and other consequential reliefs.

Respondent's Arguments

  • During the proceedings, the respondents complied with the interim order passed by the High Court.
  • A memo along with the release order dated 22.09.2022 was produced before the Court confirming that the vehicle had been released in favour of the petitioner.
  • The respondents submitted the release order for consideration of the Court.

Court Order / Findings

The Karnataka High Court observed that pursuant to its interim order, the competent authority had already released the subject vehicle in favour of the petitioner.

Since the principal relief relating to release of the vehicle had already been granted, the Court held that nothing further survived for consideration in the writ petition.

Accordingly, the writ petition was disposed of without expressing any opinion on the merits of the constitutional challenge to Sections 129 and 130, the validity of the Circular, or the confiscation order.

The Court specifically clarified that all rival contentions were kept open, and no opinion was expressed on any legal issue involved in the matter.

Important Clarification

  • The High Court did not decide the constitutional validity of Sections 129 or 130 of the CGST/KGST Acts.
  • The Court did not adjudicate upon the validity of the GST Circular or the confiscation order.
  • The writ petition was disposed of solely because the vehicle had already been released pursuant to the interim directions.
  • All legal rights and contentions of both parties were expressly kept open for consideration in an appropriate proceeding.

Sections Involved

  • Section 129 of the Central Goods and Services Tax Act, 2017
  • Section 130 of the Central Goods and Services Tax Act, 2017
  • Section 129 of the Karnataka Goods and Services Tax Act, 2017
  • Section 130 of the Karnataka Goods and Services Tax Act, 2017
  • Section 20 of the Integrated Goods and Services Tax Act
  • Articles 14, 19 and 21 of the Constitution of India
  • Article 226 of the Constitution of India

Link to Download the Order https://www.mytaxexpert.co.in/uploads/1784885026_1953compressed.pdf

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