Kerala High Court Upholds Confiscation Under Section 130 CGST Act | Says Absence Of Express Reference To Conveyance In Order Does Not Exclude It From Confiscation | Owner Failed To Prove Lack Of Knowledge
Isabella Mariam
The High Court of Kerala Single Bench of Justice Ziyad Rahman A.A. dismissed a writ petition challenging the confiscation of a transport vehicle under the CGST Act. The Court held that the confiscation order issued by the State Tax Officer was legally sustainable and found no procedural infirmity justifying judicial interference. It directed that the petitioner, having already availed provisional release of the vehicle upon deposit of penalty as per the interim order dated 02.09.2022, may pursue available appellate remedies. The final directive dismissed the writ petition without prejudice to such rights.
The petitioner is the registered owner of a truck bearing registration number RJ 14 GJ 6711. On 31.10.2021, a consignment of Arecanuts was arranged for transportation from Palakkad, Kerala to Delhi by M/s. Platinum Trade Link, the consignor. The transaction was facilitated through a local transporter. The vehicle in question was provided for this purpose. The consignor generated an E-Way Bill (Exhibit P4) and issued an invoice (Exhibit P5), both dated 31.10.2021.
On the following day, 01.11.2021, the truck was intercepted by the 4th respondent, Assistant State Tax Officer, Mobile Squad, Manjeshwar, at Pallikkara. During inspection, it was determined that the consignment was being transported without valid documentation. Pursuant to this finding, notices were issued to both the consignor and the petitioner through the truck driver, as evidenced by Exhibits P6, P7, and P8.
Subsequently, on 08.11.2021, a notice in Form GST MOV-10 (Exhibit P9) was issued under Section 130 of the CGST Act, proposing confiscation of the goods and the conveyance. The notice called upon both the petitioner and the consignor to show cause why confiscation should not be ordered. This was followed by an order dated 13.12.2021 (Exhibit P10) issued by the 3rd respondent, State Tax Officer, finalising the confiscation proceedings. On the strength of that order, a further notice dated 01.02.2022 (Exhibit P11) was issued, inviting the petitioner to remit the penalty amount in lieu of auction proceedings.
In response, the petitioner filed the present writ petition, primarily challenging the legality of Exhibits P10 and P11. The main contention advanced was that Exhibit P10 lacked a specific and express order confiscating the vehicle, which, according to the petitioner, rendered the proceedings against the conveyance legally unsustainable.
A counter affidavit was filed by the respondents. It was stated therein that the order of confiscation extended to the conveyance as well, and that the petitioner had failed to respond to the notices or discharge the statutory burden under Section 130(1)(iv) of the CGST Act. According to the respondent, multiple opportunities were granted to the petitioner, but no attempt was made to contest the proceedings.
The matter was heard on 04.06.2025. During the proceedings, it was reported that the petitioner had paid the penalty amount of Rs.3,29,063/- pursuant to the interim order dated 02.09.2022, and that the vehicle had been released provisionally.
The Court considered the arguments and examined the legality of the confiscation order. It recorded: "Even though it is not specifically mentioned in the said order as to the confiscation of the conveyance, while issuing direction in the operative portion of Ext.P10 order, it is specifically directed that the goods and conveyance shall be released on payment of tax, penalty and fine in lieu of the confiscation."
It further stated: "On going through Ext.P10 order as a whole, it can be seen that, there is no finding exonerating the vehicle from the confiscation process, whereas, Ext.P9 show cause notice contains a specific proposal to confiscate the vehicle as well."
The Court noted that the statutory burden under Section 130(1)(v) rested upon the owner to establish that the conveyance was used without their knowledge or authorisation. In that regard, it observed: "As the statute imposes a burden upon the owner to prove that the consignment was used without his knowledge or authorisation, the natural consequence of a show cause notice proposing the confiscation of conveyance, if there was no reply from the person concerned or such persons fails to discharge such burden, would be to confirm the proposal in the show cause notice."
Regarding service of notice, the petitioner had argued improper communication. However, the Court recorded: "It is specifically asserted in the counter affidavit that, the notices were served to the petitioner through his driver and other methods of communications. The said fact is not denied by way of any reply affidavit as well."
Thus, the Court concluded: "Therefore, merely because of the reason that, while ordering the confiscation in para 6 of Ext.P10 order, the conveyance was not specifically included, it cannot be assumed that, the conveyance of the petitioner was exonerated from the confiscation proceedings."
The Court issued the following direction: "In these circumstances, I do not find any valid grounds to interfere with the order passed by the 3rd respondent as evidenced by Ext.P10."
Further, the Court observed: "If at all the petitioner has any grounds to challenge the proceedings on merits, it is for the petitioner to raise the same by invoking the appellate remedies, if any available."
Accordingly, it directed: "This writ petition is dismissed without prejudice to the right of the petitioner to invoke such remedies, if available."
It also confirmed the interim arrangement made earlier, stating: "Since the vehicle is already released by payment of penalty in lieu of the confiscation, as per interim order passed by this Court on 02.09.2022, the same is made absolute, subject to the petitioner invoking appellate remedies, if any available."
Advocates Representing the Parties:
For the Petitioners: Shri. Ajay Ben Jose, Shri. Ajay V. Anand, Smt. Laya Mary Joseph, Advocates
For the Respondents: Shri. Arun Ajay Sankar, Government Pleader
Case Title: Asgar Ali v. Union of India & Ors.
Neutral Citation: 2025: KER:39710
Case Number: WP(C) No. 27856 of 2022
Bench: Justice Ziyad Rahman A.A.
