2023 (3) TMI 1201 - HC - GST

Confiscation of goods alongwith the conveyance - levy of penalty - under section 130 of the Act came to be passed without affording any opportunity to the petitioner - violation of principles of natural justice (audi alterem partem) - HELD THAT - It appears that the notice was issued on 5.10.2019 by respondent No.2-the State Tax Officer asking the petitioner to remain present before him on 15.10.2019. It is the case of the petitioner that the petitioner had informed the respondent No.2 about the order dated 14.10.2019 passed by this court whereby the notice was issued and was made returnable. It is not in dispute that on the same day, however, that is on 15.10.2019, the respondent No.2 proceeded to pass order of confiscation of goods and conveyance and demanded tax, fine and penalty under section 130 of the Act. The petitioner pointed out that he had already deposited the amount of tax and penalty. Thus, it transpires that the petitioner was called to remain present before respondent No.2 on 15.10.2019. The petitioner appeared and submitted about the pendency of the petition, however, respondent No.2 authority passed order dated 15.10.2019 under section 130 of the Act, which was on the same date. Whereby all proposals in GST MOV 10 were confirmed regarding levy of tax, fine etc. Thus, what becomes clear is that order dated 15.10.2019 under section 130 of the Act came to be passed without affording any opportunity to the petitioner. As noticed, the petitioner was called to remain present and on the same date the order came to be passed. It amounted to breach of principles of natural justice resulting into denial of reasonable opportunity to the petitioner to defend in the proceedings - proceedings are remanded to the competent authority of the respondents, which shall decide the subject matter afresh after giving opportunity to the petitioner to defend his case. Application allowed.

Summary

Issues involved:
The issues involved in this case include the setting aside of a notice for confiscation of goods and levy of penalty under section 130 of the Gujarat Goods and Services Tax Act, 2017, the release of a vehicle-truck along with the goods contained therein, and the denial of reasonable opportunity to the petitioner to defend in the proceedings.

Setting aside of notice and levy of penalty:
The petitioner filed a petition under Article 226 of the Constitution to set aside a notice dated 5.10.2019 for confiscation of goods and conveyance and levy of penalty under section 130 of the Act. An order was passed subsequent to the petition, which the petitioner challenged by amending the prayer clause. The court granted interim relief directing the release of the conveyance-truck along with the goods subject to the final outcome of the petition. The order under section 130 of the Act was set aside due to a breach of principles of natural justice, as the petitioner was not afforded a reasonable opportunity to defend in the proceedings. The proceedings were remanded to the competent authority to decide the matter afresh after giving the petitioner an opportunity to defend the case.

Denial of reasonable opportunity:
The order dated 15.10.2019 under section 130 of the Act was passed without affording any opportunity to the petitioner to defend, as the petitioner was called to remain present before the authority on the same date the order was issued. This was deemed a breach of principles of natural justice, resulting in the denial of a reasonable opportunity for the petitioner to defend in the proceedings. As a result, the order was set aside, and the competent authority was directed to complete the proceedings within eight weeks from the date of the order, giving the petitioner an opportunity to defend the case.

Final Decision:
The Special Civil Application was allowed to the extent that the order under section 130 of the Act was set aside, and the proceedings were remanded to the competent authority for a fresh decision after affording the petitioner an opportunity to defend the case. The amount of tax and penalty deposited by the petitioner would remain subject to the outcome of the proceedings, and the petitioner would be required to pay the balance amount if the final decision is against them, without prejudice to their rights to challenge the order before a higher forum.