2019 (1) TMI 678 - HC - GST

Detention order - non-compliance of the mandate under the provisions of Section 129(4) of the Act - Held that - From a plain reading of the order, it is apparent that the contention raised by the learned counsel for the petitioner, that no opportunity has been afforded under Section 129 (4) of the CGST Act stands falsified - it is apparent that the alleged owners have waived the right of hearing and have consented, levy of tax and penalty and have undertaken to pay as per the provisions of Section 129(1)(a) of the CGST Act. The Proper Officer realizing the lacuna, has proceeded to pass the rectification order after taking into consideration the objections and hence, the same is nothing but an attempt by the Proper Officer to ensure that the objections filed and contention raised by the petitioner are considered in the proper perspective and in the manner required under the Act. Hence, no malafides can be attributed to the same - this Court is of the opinion that the points raised by the petitioner does not survive for consideration. The matter requires adjudication of facts, which are seriously disputed by the parties - petition dismissed.

Summary

Issues:
Challenge to detention order, confiscation of goods, demand of tax, fine, and penalty under CGST Act, 2017. Non-compliance of Section 129(4) of the Act. Opportunity of hearing not afforded to petitioner. Alleged waiver of right of hearing by owners. Contention regarding consignees not being heard. Rectification order passed without opportunity.

Detailed Analysis:

1. Detention Order and Confiscation of Goods: The petitioner challenged the detention order, confiscation of goods, and demand of tax, fine, and penalty under the CGST Act, 2017. The petitioner, a transporter, was found transporting goods without valid documents like tax invoice and e-way bill, contravening Section 68(1) of the Act. The Revenue Department concluded it was an attempt to avoid tax, justifying the detention under Section 129(1) of the Act.

2. Non-Compliance of Section 129(4): The petitioner argued that the order was vitiated due to non-compliance with Section 129(4) of the Act, which mandates affording an opportunity of hearing. However, it was contended that the detention and seizure order were made after verification of documents provided by the driver and physical inspection of goods in the presence of the driver and an office incharge.

3. Opportunity of Hearing: The petitioner claimed that no opportunity of hearing was given before passing the impugned orders. However, the Commercial Tax Officer's order of Demand of Tax and Penalty dated 22.08.2018 showed that a personal hearing was provided to the transporter's representative, who filed necessary documents and letters during the hearing.

4. Waiver of Hearing by Owners: The alleged owners of the goods waived the right of hearing, consented to the levy of tax and penalty, and agreed to pay as per Section 129(1)(a) of the Act. Despite this, the petitioner was still heard in the matter, indicating that due process was followed.

5. Rectification Order: The rectification order dated 25.09.2018 was challenged by the petitioner, claiming it was passed without affording an opportunity. However, the HCGP argued that the rectification was necessitated due to the Proper Officer's omission to consider objections filed by the petitioner before passing the original orders.

6. Court's Decision: The Court found that the objections and contentions raised by the petitioner were duly considered and rectified by the Proper Officer, ensuring compliance with the Act. The Court held that the petitioner's arguments did not survive for consideration, as the factual disputes required proper adjudication not suitable for Article 226 jurisdiction. Consequently, the petition was rejected, emphasizing the availability of alternative remedies for the petitioner.