The Andhra Pradesh High Court bench of Justice A.V. Sesha Sai and Justice Ravi Nath Tilhari has stayed the operation of the Confiscation Notice issued under Section 130 of the CGST Act, 2017 on the ground that, with effect from January 01, 2022, the non-obstante clause has been removed from Section 130.
The Finance Act, 2022 amended Section 130 of the CGST Act to delink the proceedings relating to the confiscation of goods or conveyances and the levy of penalties from the proceedings under section 129 relating to the detention, seizure, and release of goods and conveyances in transit.
The issues raised were in respect of the applicability of Section 130 of the CGST Act post Amendment vide Finance Act, 2021.
The petitioner submitted that by invoking the provisions of Section 130 of the Central Goods and Services Tax Act, the department acted without jurisdiction. Sections 129 and 130 were amended vide Finance Act, 2021 to the effect that the “Non-Obstente” clause was removed from Section 130, while retaining the Non-Obstante clause in Section 129 and that the amendment came into effect from February 01, 2022 and, as such, from the date, Section 129 of the Act shall have overriding effect on Section 130.
The petitioner submitted that the language of Section 129 is a specific provision which deals with the goods in transit. In respect of cases pertaining to goods in transit, if at all any penalty is leviable, it shall be levied under Section 129. The Non-Obstante clause in Section 129 of the CGST Act is indicative of the legislative intent to prevent the application of any other provisions of the Act with respect to goods in transit. The show cause notice indicated that the goods were inspected when they were in transit under Section 68(3) of the CGST Act.
The department contended that the deletion of the Non-Obstante clause from Section 130 of the CGST Act does not take away the power of the respondent authorities to invoke the provision of law because the provisions of Sections 129 and 130 are independent and the authorities are authorised to exercise the power under the provisions of law.
The department submitted that the contention of the petitioner, if accepted, would render Section 130 of the CGST Act redundant.
The admitted the Writ Petition and Stayed the Operation of confiscation notice under Section 130 of the CGST Act, 2017.
Case Title: Matrix Traders Vs Deputy Assistant Commissioner