Mere statement of suspicion without detailed reasons does not suffice for invoking Section 130

Facts of the Case: In this case, the Writ Petition filed to challenge the confiscation orders, contending that the same is invalid and without jurisdiction as the authorities bypassed Section 129 of the CGST Act. The Petitioner argued that a prima facie satisfaction regarding the intention to evade tax is missing in the Show cause notice. There was violation of natural justice as the notices were served on the driver, and the petitioners were not given an opportunity to challenge the statements of the driver or the inquiry report. Further, it was contended that detention of goods should be done u/s 129 and not directly u/s 130. Also, Orders lack a DIN, violating the CBIC circular. On the other hand, the respondents contended that authorities can directly invoke Section 130 without prior invocation of Section 129 if there is an intent to evade tax. Also, DIN is only necessary for orders served directly on dealers, not for those uploaded on the portal.

Held that: The Andhra Pradesh High Court in the case emphasizes the need for tax authorities to follow procedural fairness and statutory requirements. Proper and detailed reasons must be provided in show-cause notices to justify actions under Section 130. In this Petitioners were not provided with the inquiry report or details in the show-cause notices, thus denying them a fair opportunity to present their case. Confiscation order included details not mentioned in the initial notices, which is procedurally improper. Also, the CBIC circular mandates DIN for all communications/orders, the lack of DIN on the confiscation orders violates this requirement, affecting the validity of the orders. Writ petitions were allowed, and the confiscation orders set aside.

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