2022 (4) TMI 1095 - HC - GST

Detention of goods alongwith vehicle - absence of e-Way Bill - undervaluation - bogus invoice - GSTIN number not mentioned on the invoice - HELD THAT - It is admitted case of the respondents that the invoice accompanied with the goods in question was issued by the petitioner. Therefore, the respondent no.3 has committed a manifest error of law not to afford any opportunity of hearing to the petitioner despite persuasion made by the petitioner. Thus, the impugned order under Section 129(1)(b) of the CGST/UPGST Act, 2017 has been passed in breach of principles of natural justice. Consequently, the impugned order dated 14.03.2022, under Section 129 of CGST/UPGST Act, can not be sustained and is hereby quashed. Matter is remitted back to the respondent no.3 to pass an order afresh in accordance with law after considering the reply of the petitioner dated 16.03.2022 filed pursuant to the notice under Section 129(3) of the CGST/UPGST Act - Petition allowed by way of remand.

Summary

Issues:
Detention of goods due to lack of e-Way Bill, under-valuation, and missing GSTIN number on the invoice - Breach of principles of natural justice in passing the detention order without affording an opportunity of hearing to the petitioner.

Analysis:
The petitioner, a trader of iron and steel, sold goods to a registered dealer without an e-Way Bill, leading to interception and detention of the goods. The detention order cited reasons such as the absence of an e-Way Bill, under-valuation, and a missing GSTIN number on the invoice. The respondent issued notices to the driver without specifying a date for response or a hearing, causing difficulties for the petitioner in submitting a reply due to technical issues with the temporary ID and password. Despite the petitioner's explanation regarding the missing GSTIN number, the respondent upheld the detention order without considering the factual aspects or the reply submitted by the petitioner.

The court noted that the respondent's failure to provide an opportunity for a hearing to the petitioner violated principles of natural justice. It was acknowledged that the invoice accompanying the goods was issued by the petitioner, indicating an error in the respondent's decision-making process. Consequently, the court quashed the impugned order under Section 129 of the CGST/UPGST Act, 2017, and remitted the matter back to the respondent to reconsider the case after considering the petitioner's reply and providing a reasonable opportunity for a hearing. The court clarified that its decision did not express any opinion on the merits of the petitioner's case, emphasizing the procedural aspect of affording a fair hearing.

In conclusion, the writ petition was disposed of, highlighting the importance of adhering to principles of natural justice in administrative actions. The judgment focused on rectifying the procedural irregularities in the detention order and emphasized the need for a fair and transparent decision-making process in matters concerning the detention of goods under the relevant tax laws.