Recently, the Kerala High Court came down heavily on GST authorities for bypassing statutory procedure under the CGST Act, 2017, while confiscating a truck allegedly used in tax evasion. The Court categorically held that confiscation without serving proper notice on the registered owner renders the entire proceeding void for want of jurisdiction. Emphasizing the sanctity of procedural fairness, the Court observed that “WhatsApp notice cannot replace legal compliance.”
The petitioner, a truck owner, challenged the detention and confiscation of his vehicle that had been engaged to transport bilge water from a naval ship. After the vehicle was parked by the authorities, the petitioner was allegedly informed that the goods were being investigated for tax evasion. The authorities later issued a confiscation order under the CGST Act, though the petitioner claimed he was neither involved in the evasion nor served any notice regarding the proceedings.
The petitioner vehemently argued that he had not been served with any notice under Section 130(4) of the CGST Act, which mandates an opportunity of hearing before any confiscation. He further contended that WhatsApp communication does not satisfy the legally recognized methods of service under Section 169 of the Act. He relied on two High Court decisions, M/s Lakshay Logistics (Gujarat) and Poomika Infra Developers (Madras), to assert that such procedural lapse strikes at the very root of jurisdiction.
The Court noted that “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” as per Section 130(4) of the Act. It further observed that under Section 130(1)(v), an owner is entitled to demonstrate that the vehicle was used without their knowledge or consent.
Importantly, the Court held that, “The notice stated to have been sent to the Petitioner/owner through WhatsApp is not a mode of service contemplated under Section 169 of the Act of 2017... While such a practice was permitted during the COVID-19 pandemic, it no longer constitutes a valid mode of issuing notice under the provisions of the Act.”
The Court also drew strength from the Gujarat High Court’s decision in M/s Lakshay Logistics v. State of Gujarat, where it was held that confiscation proceedings are without jurisdiction if the mandatory notice is not served on the owner.Similarly, it was noted that in the Poomika Infra Developers case, the Madras High Court had emphasized procedural compliance before confiscation.
The High Court concluded that there was a “serious lacuna in the procedure adopted” and the petitioner’s consistent stand about non-receipt of valid notice could not be disregarded.
The Division Bench allowed the appeal, quashing both the learned Single Judge’s judgment and the confiscation order dated 21 December 2024. The matter was remanded to the competent authority for fresh adjudication.
The Court directed that a fresh notice under Section 130 must be served on the petitioner in accordance with Section 169, followed by an opportunity of hearing. The authority was directed to complete the process within three weeks from the petitioner’s appearance. The Court made it clear that it had not ruled on the merits of the confiscation and that its judgment would not affect confiscation of goods owned by third parties.
Case Title: Mathai M.V vs. The Senior Enforcement Officer & Anr.
Case No.: WA NO. 973 OF 2025
Coram: Justice Mr. Nitin Jamdar, Justice Basant Balaji
Advocate for Petitioner: Adv. Sri. Faizel K.
Advocate for Respondent: Adv. Thushara James
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