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2020 ] CONFISCATION AND REDEMPTION OF CONFISCATED GOODS UNDER CGST A171

Section 130(4) of the CGST Act, 2017
“(4) No order for confiscation of goods or conveyance or for imposition of
penalty shall be issued without giving the person an opportunity of being heard.”
[Emphasis supplied]
From perusal of Section 130(4) of CGST Act, 2017, it is clear that this provision is
not as nuanced as Section 124 of the Customs Act, 1962. Nevertheless, from the
expression “without giving the person an opportunity of being heard” as has been
used in Section 130(4) of the CGST Act, 2017, it is amply clear that the proceeding
to be conducted before passing the order of confiscation under Section 130(4) of
the CGST Act, 2017, has to be in conformity with Principles of Natural Justice.
Therefore, irrespective of the fact that whether or not provisions of Section 130
of the CGST Act, 2017, explicitly enjoins on the concerned proper officer to issue
show cause notice (hereinafter referred to as “SCN”), has to be issued, for, issu-
ance of SCN is sine qua non for fair hearing. Further, it is settled principle of law
that “SCN is meant to give the person proceeded against a reasonable opportuni-
ty of making his objection against the proposed charges. Importance of a show
cause notice has also been reiterated by Hon’ble Supreme Court in the case of
Umanath Pandey v. State of UP [2009] 12 SCC 40-43 as under :
“Notice is the first limb of this principle. It must be precise and unambiguous.
It should appraise the party determinatively the case he has to meet. Time
given for the purpose should be adequate so as to enable him to make his
representation. In the absence of a notice of the kind and such reasonable opportuni-
ty, the order passed becomes wholly vitiated. Thus, it is but essential that a party
should be put on notice of the case before any adverse order is passed against him.”
[Emphasis supplied]
In the case of Biecco Lawrie Ltd. v. State of West Bengal [2009] 10 SCC 32, the
Hon’ble Supreme Court observed that :
“One of the essential ingredients of fair hearing is that a person should be
served with a proper notice, i.e. a person has a right to notice. Notice should
be clear and precise so as to meet and make an effective defence. Denial of no-
tice and opportunity to respond result in making the administrative decision
as vitiated. The adequacy of notice is a relative term and must be decided
with reference to each case. But generally a notice to be adequate must con-
tain the following : (a) time, place and nature of hearing; (b) legal authority
under which hearing is to be held; (c) statement of specific charges which a
person has to meet.”
From the perusal of above-mentioned observations of the Hon’ble Supreme
Court, it can be easily inferred that though not specifically written in Section
130(4) of the CGST Act, 2017, SCN has to be given in writing to the person from
whose possession goods are proposed to be confiscated informing him the
grounds on which his goods are proposed to be confiscated along the lines of
Section 124 of the Customs Act, 1962. Further, it must also be noted that the per-
son against whom SCN has been issued has to be given an opportunity of per-
sonal hearing. [Refer - A.F. Gani v. Commissioner of Customs, Madras, 1997 (89)
E.L.T. 219 at p. 220 (Tribunal) and Circular No. 41/15/2018-GST (pg.27).]
At this juncture, it would be pertinent to bear in mind that it is a long set-
tled position in law that the opportunity of being heard should be real, reasona-
ble and effective and the same should not be for name sake. It should not be a
paper opportunity [CIT v. Panna Devi Saraogi [1970] 78 ITR 728 (Cal.)]. In keeping
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