2020 (10) TMI 574 - HC - GST

Confiscation of goods alongwith vehicle - Section 130 of the Goods and Service Tax Act - principles of natural justice - HELD THAT - In the instant case, the learned Government Pleader fairly conceded that there was no statement of reasons that accompanied Exts.P4 and P4(a) orders, but all that the adjudicating authority had done was to enclose the separate sheets that had accompanied the notices issued in Form GST MOV-10 (Exts.P3 and P3(a)) to the assessee. In fact paragraph 2 of Form GST MOV-11 contemplates the separate enclosure of the contents of the notice issued in Form GST MOV-10 along with the order that is to be served on the assessee in Form GST MOV-11. The said requirement is over and above the requirement to give reasons to support the demand in the order of confiscation passed in Form GST MOV-11. In as much as it is not in dispute that the reasons that weighed with the adjudicating authority while passing the impugned orders of confiscation were not enclosed with the said orders, Exts.P4 and P4(a) orders have to be quashed on the ground that they do not reflect an application of mind by the adjudicating authority on the objection/ explanation of the assessee against the proposal for confiscation - As is well settled in law, the absence of reasons by an adjudicating authority in the order passed by him would suggest a non application of mind by the adjudicating authority and the presumption to be drawn by the reviewing court is that the adjudicating authority did not have any reason to give. The matter is remanded to the adjudicating authority for a reconsideration of the matter and to pass fresh orders after hearing the petitioner - petition allowed by way of remand.

Summary

Issues:
1. Confiscation of goods and vehicles under Section 130 of the GST Act.
2. Adequacy of opportunity to file objections to confiscation notices.
3. Consideration of objections/explanations before passing confiscation orders.
4. Compliance with procedural requirements under Section 130 of the GST Act.
5. Absence of reasons in the orders of confiscation.
6. Application of mind by the adjudicating authority.

Analysis:

1. The petitioner challenged the confiscation of goods and vehicles under Section 130 of the GST Act based on orders Exts.P4 and P4(a). The petitioner contended that it did not receive a sufficient opportunity to respond to the confiscation notices and that the orders lacked reasons to demonstrate an application of mind by the adjudicating authority.

2. The respondent, in response, stated that the vehicles were tracked using automatic number plate recorder cameras, showing multiple movements under the same transport document. The respondent argued that the necessary notices were issued, statements were recorded from the drivers and manager, and the orders of confiscation were passed after complying with the procedural requirements under the GST Act.

3. Upon hearing both parties, the court found that while the drivers and manager were heard, the orders did not reflect a consideration of the objections/explanations provided in response to the confiscation notices. The court emphasized that fairness required the assessee to have an adequate opportunity to respond to allegations before passing confiscation orders.

4. The court noted that the orders lacked reasons and failed to enclose the objections/explanations provided by the assessee, as required by the statutory format. Citing legal precedents, the court held that the absence of reasons indicated a lack of application of mind by the adjudicating authority, necessitating the quashing of the orders.

5. Relying on judgments from the Supreme Court and High Courts, the court concluded that the orders of confiscation (Exts.P4 and P4(a)) should be quashed due to the absence of reasons and lack of consideration of objections/explanations. The matter was remanded to the adjudicating authority for a fresh consideration, directing the petitioner to appear for a hearing and present material to support their contentions.

6. In the final decision, the court quashed the orders of confiscation, remanded the matter for reconsideration, and instructed the adjudicating authority to pass fresh orders after hearing the petitioner and considering the submissions made. The petitioner was given an opportunity to present evidence to support their case during the reconsideration process.