Clerical error cannot justify confiscation under Section 130 of GST
Under the GST law, Section 130 of the CGST Act deals with confiscation of goods in cases of intentional tax evasion. But can a clerical mistake during transport—like a wrong invoice date or vehicle number—be treated as a valid reason to confiscate goods? Recent High Court judgments say no, unless there’s evidence of intent to evade tax.
What Section 130 of CGST Act Actually Says
Section 130 allows authorities to confiscate goods, conveyances, and impose penalties in cases where:
- Goods are supplied or received in violation of the law
- There’s clear intent to evade tax
- Goods are stored or transported without valid documents
- Fake invoices or identity fraud is involved
However, courts have clarified that mere procedural lapse or human error cannot trigger Section 130, which is a punitive provision meant for wilful default.
Key Judgments: Clerical Mistake ≠ Tax Evasion
Here are notable rulings that set the tone:
| Case Name | Court | Verdict |
|---|---|---|
| M/s Shiv Enterprises vs State of U.P. | Allahabad HC | Wrong invoice date not a ground for confiscation |
| Indus Towers Ltd vs Assistant Commissioner | Kerala HC | E-way bill error was clerical, not deliberate |
| Sitaram Roadways vs State of U.P. | Allahabad HC | Held: Section 130 applies only when there’s clear evasion intent |
| Gati Kintetsu Express vs Assistant Commissioner | Telangana HC | Goods can’t be confiscated for minor documentation error |
All these courts held that Section 130 cannot be invoked without proving mala fide intent. Clerical errors can attract Section 129 (detention), but not confiscation under Section 130.
Section 129 vs Section 130: Know the Difference
| Provision | Purpose | Triggers | Penalty |
|---|---|---|---|
| Section 129 | For detention of goods during transit | Missing documents, expired e-way bill | Tax + penalty equal to tax amount |
| Section 130 | For confiscation, a harsher penalty | Requires intent to evade | Fine + tax + penalty + possible seizure |
So, if your consignment has a clerical issue but no tax evasion, Section 129 may apply—but not 130.
Expert Tip: Respond Quickly and Use Legal Recourse
If your goods are detained or a confiscation notice is issued:
- File a reply under Rule 142(1A) explaining the clerical nature of the error
- Attach valid documents proving genuine transaction
- If needed, approach High Court under Article 226—most courts grant relief in bona fide cases
👉 Pro tip: Always ensure transport staff are trained in e-way bill documentation and invoice handling to avoid unnecessary litigation.
CBIC Clarification Also Supports This View
While there’s no specific circular on clerical errors under Section 130, CBIC in Circular No. 41/15/2018-GST clarified that minor mistakes in documentation can be overlooked if there’s no intent to evade. This supports the idea that confiscation should be proportionate and not automatic.
When Can Confiscation Be Justified?
Section 130 can apply in cases like:
- Transporting goods without invoice
- Use of bogus GSTIN
- Deliberate misclassification to evade higher rate
- Use of fake e-way bills
- Non-payment of tax despite repeated notices
In contrast, the following do not justify confiscation:
- Invoice date typo
- Wrong vehicle number on e-way bill
- Delayed e-way bill update due to system error
- Miscommunication between vendor and transporter
Final Word
Confiscation under Section 130 is not meant for genuine mistakes. If there’s no intent to evade tax, and documentation is otherwise valid, GST authorities should not penalise honest taxpayers.
Summary
GST authorities cannot invoke Section 130 to confiscate goods for clerical mistakes like typo in e-way bill or invoice. Courts insist on proof of tax evasion intent.
FAQs
Q1. Can a wrong vehicle number in e-way bill lead to confiscation?
No, unless the department proves it was done to evade tax. Courts treat such errors as procedural.
Q2. What’s the remedy if goods are confiscated for a clerical error?
File a reply under Rule 142(1A) and approach the jurisdictional High Court if necessary.
Q3. Can both Section 129 and 130 be invoked together?
Only if intent to evade tax is evident. Otherwise, Section 129 alone may apply.
Need help responding to a GST notice or dealing with wrongful confiscation?
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