2019 (12) TMI 45 - HC - GST

Release of detained goods along with vehicle - discrepancy in the origin of goods - section 129 of GST Act - Principles of natural justice - HELD THAT - This Court is of the considered opinion that the order impugned cannot be held to be justifiable for the reason that the respondent having issued show-cause notice calling upon the petitioner to file objections, cannot turn around and take a decision that the petitioner has no locus standi either to file objections or to putforth dispute on behalf of the consignor/consignee or the owner of the conveyance. Indeed, the order impugned is against the principles of natural justice which is the fundamental parameter required to be observed by the quasi- judicial authority. Hence, the petitioner is at liberty to file any additional objections to the show-cause notice dated 11.10.2019 issued under Section 129(1)(b) of the Act within a period of ten days from the date of receipt of certified copy of the order - the proceedings are restored to the file of the respondent - petition disposed off.

Summary

Issues:
Challenge to order under Section 129(1)(b) of the Karnataka Goods and Services Tax Act/Central Goods and Services Tax Act, 2017; Locus standi of the petitioner to dispute or raise issues on behalf of consignor/consignee or person in charge of conveyance.

Analysis:
The petitioner, a transporter registered under the GST Act, was transporting goods from Tamil Nadu to New Delhi when the conveyance was intercepted by the respondent for verification. The respondent concluded that the goods did not originate from Tamil Nadu, leading to the retention of the conveyance and goods under Section 129(1) of the GST Act. The petitioner submitted representations seeking release, but a show-cause notice was issued under Section 129(1)(b) alleging the non-existence of the consignor. The petitioner contended that the decision that they lacked locus standi to dispute or raise issues was arbitrary and against natural justice principles.

The counsel for the petitioner argued that the respondent's decision on locus standi was illegal and arbitrary, violating natural justice principles. On the other hand, the revenue's counsel contended that the petitioner was neither the consignor nor consignee and that the release of the conveyance fell under Section 130(2)(iii), suggesting no mandatory penalty payment under Section 129(1)(b).

The Court held that the respondent's decision on the petitioner's locus standi was unjustifiable, as issuing a show-cause notice implied the right to file objections. The order was deemed against natural justice principles, a fundamental requirement for quasi-judicial authorities. The Court allowed the petitioner to file additional objections within ten days and directed the respondent to consider all objections and pass an expedited order in accordance with the law.

Consequently, the Court quashed the impugned order, restoring proceedings to the respondent for a fair hearing. The respondent was instructed to provide a reasonable opportunity for a hearing, consider all objections, and decide the matter promptly in compliance with the law. All rights and contentions of the parties were left open, and the writ petition was disposed of accordingly.