2020 (3) TMI 1085 - HC - GST

Detention of goods alongwith vehicle - reasonable opportunity of being heard provided to the petitioner or not - HELD THAT - This Court would only venture to observe that in cases of this nature, elementary Cannons of natural justice and fairness would require that the party should be personally heard by the decision maker either in person or through authorised representative/counsel, if any, and thereafter a considered decision is taken thereon, instead of driving the affected party like the present petitioner having to approach this Court and then litigate the matter on account of violation of natural justice - It is trite and it is too elementary to require the citation of any judicial authority that where the decision taken by the decision maker would inflict adverse civil consequence on the affected party, then the elementary principles of reasonableness, fairness and natural justice would require that the affected party is heard by the decision maker before the latter renders decision thereon. The 2nd respondent Commissioner or the Head of the Department concerned may ensure that necessary instructions are given to the officials concerned in the Department so that unnecessary litigations of this nature could be easily avoided - petition disposed off.

Summary

Issues:
1. Detention of goods by the respondent without proper authority.
2. Challenge to the order demanding tax and penalty.
3. Violation of natural justice and fairness in issuing the impugned order.
4. Remittance of the matter for fresh decision by the respondent.

Analysis:
1. The petitioner, engaged in the trading of motor cycles, entered into a lease agreement for an additional place of business at Karunagappally. The respondent detained a consignment of 10 motor cycles meant for exhibition, claiming the petitioner could not have an additional business place there. The petitioner challenged this detention through a writ petition, seeking to quash the order and release the goods unconditionally. The court directed the release of goods on a bank guarantee, questioning the lack of opportunity for the petitioner to be heard before the impugned decision.

2. The court noted that the respondent issued an order demanding tax and penalty without granting a hearing to the petitioner, despite scheduling a personal hearing. The lack of a reasonable opportunity for the petitioner to present their case was deemed a violation of natural justice and fairness. The court held the impugned order illegal and ultra vires, ordering its quashing and remittance of the penalty decision to the respondent for a fresh determination.

3. The judgment emphasized the importance of adhering to natural justice principles, stating that decision-makers must allow affected parties to be heard before rendering adverse decisions. It underscored that fair hearings could prevent unnecessary litigation, urging officials to ensure compliance with procedural fairness to avoid such disputes. The court highlighted that the affected party should not be blamed for seeking legal recourse when fundamental principles of fairness are disregarded.

4. In conclusion, the court disposed of the writ petition with observations on the significance of affording parties a fair hearing and directing the respondent to reevaluate the penalty matter after granting the petitioner an opportunity to present their case. The judgment aimed to promote procedural fairness and discourage unnecessary litigation by upholding principles of natural justice in administrative decisions.