2023 (4) TMI 305 - HC - GST

Levy of Tax and penalty - Seeking release of seized vehicle alongwith the goods - expired E-way bill - petitioner submitted that only due to mechanical defect of the vehicle, the validity of the e-way bill had expired - HELD THAT - As per Section 129(3) of the said Act, the seizing officer has to issue notice specifying the penalty payable. Section 129(4) of the Act says that no penalty can be determined without giving the person concerned an opportunity of being heard. Despite the said Act prohibits imposing tax and penalty, but the respondent no. 3 without giving any opportunity to the petitioner of being heard had passed the impugned order dated 01.04.2022. It is also evident from the record that the validity of the e-way bill was upto 17.03.2022, but due to some mechanical defect the vehicle reached Churaibari on 18.03.2022, and by that time the validity of e-way bill has expired for which the vehicle was detained and seized and ultimately on 18.03.2022 the driver of the vehicle was informed regarding such seizure - Despite specific direction passed by this court, the respondent no. 3 caused an assessment imposing tax and penalty under the Act and Rules. Even the respondents did not feel it necessary to issue any notice upon the petitioner in terms of the order passed by this court after passing of the judgment, which act is purely non-compliance of the order passed by this court. The impugned order dated 01.04.2022 passed by the respondent no. 3 and the demand made by the respondent no. 4 imposing penalty and tax upon the petitioner by its order dated 02.04.2022 stands quashed and are set-aside - Petition allowed.

Summary

Issues:
The issues involved in the judgment are the detention and seizure of goods due to expired e-way bill, imposition of tax and penalty without opportunity of being heard, non-compliance with court orders, and quashing of impugned orders.

Detention and Seizure of Goods:
The petitioner, a civil contractor, purchased a concrete machine for a government project but faced detention of goods due to an expired e-way bill. Despite the mechanical defect causing the delay, the vehicle was detained, and the seller approached the court for release, which was granted on providing an undertaking. However, the respondent imposed tax and penalty without giving an opportunity to be heard, violating Section 129 of the GST Act.

Imposition of Tax and Penalty:
The respondent issued a notice under Section 129(3) of the CGST and SGST Act, imposing tax and penalty on the driver of the vehicle without considering the seller's request to file a reply. The court found that the imposition of tax and penalty without providing an opportunity for hearing was against the provisions of the Act, leading to the quashing of the impugned order dated 01.04.2022.

Non-Compliance with Court Orders:
Despite specific directions from the court to release the goods and vehicle based on an undertaking, the respondent failed to comply and instead imposed tax and penalty arbitrarily. The court noted the non-compliance with its order and the lack of issuance of a show-cause notice to the petitioner post-judgment, indicating a violation of the principles of natural justice.

Quashing of Impugned Orders:
The judgment quashed the impugned order dated 01.04.2022 passed by the respondent imposing tax and penalty and the demand notice issued on 02.04.2022. The court allowed the writ petition, emphasizing that the respondents must initiate actions in accordance with the law and highlighting the importance of following court orders and principles of natural justice.

Conclusion:
The judgment addressed the issues of detention and seizure of goods, imposition of tax and penalty without a hearing, non-compliance with court orders, and ultimately quashed the impugned orders while emphasizing the importance of adherence to legal procedures and principles of justice.