The word “confiscation” has not been defined in the Act. The concept is derived from Roman Law wherein it meant seizing or taking into the hands of emperor, and transfer to Imperial “fiscus” or Treasury. The word “confiscate” has been defined in Aiyar’s Law Lexicon as to “appropriate (private property) to the public treasury by way of penalty; to deprive of property as forfeited to the State.”
Goods can be confiscated in certain circumstances. When goods are confiscated the property in such goods vest in government. Goods or conveyance shall be liable to confiscation if any person—
• supplies or receives any goods in contravention of any provision of this Act and such contravention with intent to evasion of tax payable under the Act, or
• does not account for any goods in the manner required under the Act, or
• supplies goods that are liable to tax under the Act without applying for registration
• contravenes any provision of the Act/Rules with the intention of evading payment of tax
• uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance,
The title in the confiscated goods shall vest in the Government and every Police officer to whom the proper officer makes a request in this behalf, shall assist in taking possession of the goods. The proper officer shall, after providing an opportunity of being heard by serving a notice on the owner or person in charge of the goods, shall proceed to levy penalty which shall be higher of
• The tax evaded on the confiscated goods or
• Rs. 10,000
- At the time of confiscation the owner or person in charge shall be given an option to pay fine in place of confiscation. The fine shall not be more than the market value of goods and less than the fine levied at the time of detention as discussed in para 24.12 above.
- When the conveyance carrying the goods don’t belongs to the owner of good e.g. it may belong to a transporter then such person shall be given an option to pay a fine equals to the tax on value of Goods in place of confiscation.
- When the fine is not paid up to three months and the goods are not required for the purpose of any proceedings the P0 may dispose of such goods and deposit the recovered amount to the account of government.