Facts of the Case

The petitioner, M/s Bright Road Logistics (GSTIN 29AGSPB7424K2ZW), a road transporter, had its consignment of mixed metal scrap intercepted at Gurugram on 20.05.2018 under Section 68(3) of the CGST/HGST Act and Section 20 of the IGST Act. Documents produced showed invoices and e-way bills dated 26.04.2018 from a Tamil Nadu supplier, but the driver claimed the goods were loaded from Bengaluru on 14.05.2018. An order dated 29.05.2018 under Section 129(1)(a) directed release on payment of Rs.35,36,000 (tax and penalty); the amount was not paid, and a further show cause notice under Section 130 led to an order dated 12.06.2018 directing payment of integrated tax, penalty and fine in lieu of confiscation totalling over Rs.44 lakh. Weighment slips recovered from the vehicle showed movements on 01.05.2018 and 05.05.2018 inconsistent with the 26.04.2018 invoices, and one consignment worth Rs.72,570 had no e-way bill at all. The First Appellate Authority dismissed the appeal on 26.11.2018, upholding the confiscation.

Issues Involved

  1. Whether the Haryana State Tax officer, as Proper Officer, was competent to inspect, detain and pass orders under Sections 129 and 130 of the CGST Act in respect of goods in inter-State movement governed by the IGST Act.
  2. Whether the confiscation order under Section 130, upheld by the Appellate Authority, was legally sustainable on the facts found — reuse of documents and discrepant weighment records suggesting an intention to evade tax.

Petitioner's Arguments

  • The vehicle was transporting inter-State goods and was not found loading or unloading within Haryana, so State Tax officers — delegated only limited powers such as refund under Sections 54/55 and registration — were not empowered to impound the vehicle or invoke Sections 129 and 130 of the CGST/IGST Act.
  • The vehicle was moving with invoices and e-way bills issued by the dealer in accordance with GST rules, and no deficiency was found in the documents, making the detention and confiscation illegal.
  • The Appellate Authority did not properly consider these submissions in dismissing the appeal.

Respondent's Arguments

  • Cross-empowerment under Section 4 of the IGST Act and Section 6 of the CGST Act allows State authorities under the HGST Act to also enforce CGST and IGST Act provisions, including Sections 129 and 130, supported by a specific delegation order dated 07.12.2017 assigning these functions to the Assistant Excise and Taxation Officer.
  • On examination, the documents showed discrepancies — origin shown as Tamil Nadu in the paperwork against the driver's own claim of loading from Bengaluru, weighment slips proving actual movement dates inconsistent with the invoices, and one consignment transported without any e-way bill — establishing the goods were not accompanied by genuine documents and were rightly confiscated.
  • The petitioner was found to be a habitual tax offender, with another of its vehicles separately penalized under Section 129(1) for over Rs.14.74 lakh.

Court Order / Findings

  • On the jurisdiction point, the Court held that by virtue of Section 4 and Section 20 of the IGST Act read with Section 6 of the CGST Act, and the Commissioner's delegation order dated 07.12.2017, the Assistant Excise and Taxation Officer of State Tax was a competent Proper Officer authorised to act under Sections 129 and 130 of the IGST Act for inter-State movement, following Madhya Pradesh and Allahabad High Court precedent on cross-empowerment.
  • On facts, the vehicle's own weighment slips (dated 01.05.2018 and 05.05.2018) contradicted the 26.04.2018 invoices' claimed origin and movement dates, and one consignment moved entirely without an e-way bill — establishing reuse of documents with mala fide intention to evade tax, which is impliedly proved once genuine and proper documents are shown to be absent.
  • "Intention to evade payment of tax" is an essential ingredient for invoking Section 130, and on these facts the Court found it satisfied; hiding the truth and tendering falsehood are per se evidence of mens rea to evade tax.
  • The Appellate Authority's order upholding the confiscation and penalty was found to be a well-reasoned order calling for no interference in writ jurisdiction.
  • The writ petition was found devoid of merit and dismissed.

Important Clarification

State GST/Excise officers are cross-empowered under Section 4 and Section 20 of the IGST Act read with Section 6 of the CGST Act to inspect, detain and confiscate goods and conveyances moving inter-State, provided a delegation notification under the corresponding State Act assigns them the relevant Section 129/130 functions — territorial location of loading/unloading within the State is not a bar. On merits, discrepancies between a consignment's documented origin/date and independently recovered evidence such as weighment slips can, by themselves, support an inference of intention to evade tax sufficient to sustain confiscation under Section 130, even without a separate finding of deliberate fraud beyond the document mismatch itself.

Sections Involved

  • Section 129, CGST Act, 2017 – detention, seizure and release of goods and conveyances in transit on payment of tax and penalty, failing which proceedings under Section 130 follow.
  • Section 130, CGST Act, 2017 – confiscation of goods or conveyances and levy of penalty where goods are supplied/received in contravention of the Act with intent to evade tax.
  • Section 20, IGST Act, 2017 – applies CGST Act provisions on inspection, search, seizure and arrest, mutatis mutandis, to inter-State supply under the IGST Act.
  • Section 4, IGST Act, 2017 and Section 6, CGST Act, 2017 – cross-empowerment of State GST officers to act as Proper Officers under the Central/Integrated GST Acts.

Decision – In Favour of

In favour of the Department — the confiscation of goods and the conveyance, and the penalty imposed under Sections 129 and 130 of the CGST Act, were upheld, and the writ petition was dismissed.

Case Details

High Court of Punjab and Haryana at Chandigarh; CWP-2490-2019 (O&M); Coram: Hon'ble Mr. Justice G.S. Sandhawalia and Hon'ble Ms. Justice Harpreet Kaur Jeewan; Reserved on 06.07.2023, Pronounced on 09.08.2023; Neutral Citation: 2023:PHHC:103581-DB.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.