2022 (7) TMI 134 - HC - GST

Confiscation of goods carried by the petitioner - section 130 of the Goods and Services Tax Act, 2017 - HELD THAT - It was submitted that the authorities sought to derive their powers to overcome the possession of the petitioner of goods in transit from section 129 of the GST Act. It was submitted that since section 129 of the GST Act begins with the non-obstante clause, it is a provision independent of section 130. It was submitted that the entire exercise of powers under section 130 was without jurisdiction. The above question raised by the petitioner would require a detailed examination, it could be immediately noticed that the impugned order came to be passed in a quick succession as noticed above, that too without permitting the petitioner to file reply. The hot hurry on the part of the authorities sacrificed the right of the petitioner to reply and in the process, there was evident breach of principles of natural justice to the prejudice to the petitioner. A prima facie case is made out for grant of interim relief - Rule, returnable on 21.07.2022.

Summary

Issues: Challenge to order under section 130 of the GST Act, 2017; Breach of principles of natural justice; Grant of interim relief.

Challenge to order under section 130 of the GST Act, 2017:
The petition challenges an order passed by the competent authority under section 130 of the Goods and Services Tax Act, 2017, confiscating goods carried by the petitioner. The petitioner contends that the authorities acted without jurisdiction by invoking section 129 of the GST Act to overcome the petitioner's possession of goods in transit. The petitioner argues that the hurried nature of the proceedings led to a breach of principles of natural justice, as the petitioner was not given an opportunity to reply before the order was passed.

Breach of principles of natural justice:
The court notes that the impugned order was passed swiftly, without allowing the petitioner to file a reply, sacrificing the petitioner's right to be heard. This haste resulted in a clear breach of principles of natural justice, prejudicing the petitioner. Consequently, the court finds that a prima facie case exists for the grant of interim relief to address the procedural shortcomings in the authorities' actions.

Grant of interim relief:
In light of the circumstances and the petitioner's submission, the court deems it appropriate to grant interim relief. The court directs the respondents to release the goods and conveyance of the petitioner, subject to the condition that the petitioner deposits Rs. 40 lakhs with the competent authority within ten days. Additionally, the petitioner is required to furnish a bond of Rs. 1,17,80,550 when the final order is passed, which includes the determination of the fine in lieu of confiscation of goods. Non-compliance with these conditions will result in the vacation of the interim relief granted.

This judgment highlights the importance of adhering to principles of natural justice in administrative proceedings under the GST Act, emphasizing the need for procedural fairness and the right to be heard before adverse orders are passed. The court's decision to grant interim relief underscores the significance of ensuring that parties are not unfairly prejudiced by procedural irregularities or hasty actions by authorities.