What does this section say?

Section 130 provides for confiscation of goods, conveyances, and levy of penalties in serious cases involving deliberate tax evasion and fraudulent activities. Confiscation is a much more severe action than detention under Section 129 because it may result in the Government permanently taking possession of the goods or vehicle involved in the offence.

The section applies where a person supplies or receives goods with the intention of evading tax, fails to account for taxable goods, transports goods without proper documents with intent to evade tax, suppresses transactions, or uses conveyances for carrying goods in contravention of GST provisions. The existence of an intention to evade tax is a crucial factor while invoking this section.

Before confiscation is ordered, the taxpayer must be issued a notice and given a reasonable opportunity of being heard. The proper officer is required to consider the facts, evidence, and explanation submitted by the taxpayer before passing an order. In many cases, the owner may be given an option to redeem the confiscated goods or conveyance upon payment of a redemption fine, tax, penalty, and other applicable charges.

Section 130 serves as a strong deterrent against organized tax evasion, fake invoicing, clandestine movement of goods, and other fraudulent practices that adversely affect government revenue.

Example

A trader repeatedly transports goods using fake invoices and intentionally suppresses taxable supplies to evade GST. After due proceedings, the goods and vehicle may be confiscated under Section 130.

Key Points

• Applies to serious and intentional tax evasion cases.
• Goods and conveyances may be confiscated.
• Opportunity of hearing is mandatory.
• Redemption fine may be payable for release.
• Used in cases involving fraud and deliberate non-compliance.

One-Line Summary

Section 130 empowers GST authorities to confiscate goods and conveyances involved in deliberate tax evasion and levy substantial penalties.