2018 (9) TMI 609 - HC - GST

Non-speaking order - Seizure of goods - while the petitioner submitted detailed representation pointing out that the goods and the bag containing the receipts had been stolen without taking into consideration the averments made in the representation the respondents have proceeded to pass order under Section 130 - Held that - This Court finds that the requirement of Section 129 (4) & (5) of the Act has not been followed and the concerned authority has failed to take notice of the objections and it cannot be said that the order impugned is a speaking order. The respondents are directed to release the seized goods in terms of Rule 140 of the Central Goods and Service Tax Rules 2017. Petition disposed off.

Summary

Issues:
1. Failure to consider petitioner's objections before passing order under Section 130.
2. Violation of Section 129(4) & (5) of the Act.
3. Request for release of perishable goods seized in May 2015.

Issue 1: Failure to consider petitioner's objections before passing order under Section 130
The petitioner argued that despite submitting a detailed representation stating that the goods had been stolen, the respondents proceeded to pass an order under Section 130 without considering the objections raised in the representation. The Court observed that the order was passed without proper application of mind and in a mechanical manner, failing to examine the submissions made by the petitioner before issuing the order.

Issue 2: Violation of Section 129(4) & (5) of the Act
The Court highlighted that the authority failed to adhere to the requirements of Section 129(4) & (5) of the Act, which mandate giving the concerned person an opportunity to be heard before determining tax, interest, or penalty. The Court emphasized that a speaking order with reasons for not accepting objections must be passed, allowing the aggrieved party to challenge it by filing an appeal under Section 107 of the Act. Since this procedure was not followed in the present case, the Court deemed the order as not a speaking order and set it aside.

Issue 3: Request for release of perishable goods seized in May 2015
The petitioner requested the release of perishable goods that had been confiscated and were in possession of the respondents since May 2015. The petitioner offered to provide a security bond in lieu of the goods. The respondents expressed concerns about recovering the amount if a security bond was accepted. Considering Rule 140 of the Central Goods and Service Tax Rules, 2017, which allows for the release of seized goods on a provisional basis upon execution of a bond and furnishing of a bank guarantee, the Court directed the respondents to release the seized goods in accordance with the said rules.

In conclusion, the Court set aside the order passed under Section 129(3) of the Act and the subsequent proceedings under Section 130, directing the respondents to provide a fair opportunity of hearing to the petitioner. The Court also instructed the release of the seized goods as per Rule 140 of the CGST Rules, 2017. The petitioner was granted the right to file an appeal under Section 107 of the Act if further aggrieved by the order, ensuring due process and fair treatment in the legal proceedings.