2017 (12) TMI 342 - HC - GST

UP GST - detention of goods - petitioner was not given any opportunity to show cause or give reply to the allegation on which goods have been seized - goods detained on account of absence of Transit Declaration Form (TDF) - Held that - Inasmuch as the petitioner had no notice or opportunity to explain his conduct with respect to the discrepancy in the Tax Invoice alleged in the seizure order, we consider it proper to set aside the orders passed u/s 129(1) and 129(3) of the Act - matter remanded for reexamination - appeal allowed by way of remand.

Summary

Issues:
Challenge to order under Section 129(1) U.P. GST Act and penalty order under Section 129(3) of the Act based on discrepancy in tax values in Tax Invoices.

Analysis:
The petitioner, involved in transporting 'Panmasala' from Delhi to Jharkhand through Uttar Pradesh, faced detention of goods on 27.10.2017 due to the absence of a Transit Declaration Form (TDF). The seizing authority, while passing the seizure order on 28.10.2017, noted a significant discrepancy in the IGST and compensation cess values between the Tax Invoice accompanying the goods and the copy filed by the petitioner. This led to an inference of an intention to evade tax against the petitioner, resulting in a penalty order on 31.10.2017.

The petitioner contended that the detention and seizure were solely due to the absence of the TDF form, with no other grounds disclosed initially. However, the respondent argued that the seizure was justified as the tax evasion intention was evident from the contradictory tax values in the two Tax Invoices. The Court observed that the petitioner was not given an opportunity to explain the discrepancy before the seizure order was passed, violating the principles of natural justice.

Consequently, the Court set aside the orders dated 28.10.2017 and 31.10.2017, remitting the matter to respondent no. 4. The petitioner was directed to treat the seizure order as a show cause notice and provide a reply within one week. Respondent no. 4 was instructed to pass a fresh order based on the reply within a week thereafter. Notably, the vehicle involved was to be released without any security since there were no allegations against it.

In conclusion, the writ petition challenging the orders under Sections 129(1) and 129(3) of the U.P. GST Act was disposed of, emphasizing the importance of providing an opportunity to be heard before adverse actions are taken based on allegations of tax evasion.