2021 (3) TMI 128 - HC - GST

Violation of principles of natural justice - petitioner submits that the first respondent without considering the material placed by the petitioner has issued the impugned endorsement and further the first respondent has not considered the appeal on merits and rejected on unwarranted grounds - HELD THAT - It is not in dispute that the petitioner aggrieved by the order passed by the second respondent, filed an appeal before the first respondent. The first respondent without assigning any reasons has rejected the appeal by issuing the impugned endorsement. Thus, the impugned endorsement issued by the first respondent is not a speaking order. Though the petitioner placed material before the first respondent, without considering the same, merely on the ground that the writ petition filed by the consigner, which is pending, rejected the appeal. The first respondent without application of mind has proceeded to reject the appeal which is arbitrary and in contravention of principles of natural justice. The said endorsement is liable to be set aside. The matter is remitted to first respondent to reconsider the appeal and pass appropriate order in accordance with law within a period of three months from the date of receipt of a certified copy of this order - Petition allowed by way of remand.

Summary

Issues:
Challenging impugned endorsement by first respondent, application of principles of natural justice, validity of rejection of appeal without reasons.

Analysis:
The petitioner, a transport contractor registered under the GST Act, hired goods conveyance from a third party to transport metal scrap consignment. The goods were intercepted by the second respondent, who doubted the consignor's bonafide and initiated proceedings under Section 129 of the CGST Act, detaining the goods. The consigner and petitioner were unable to provide evidence due to lockdown restrictions. The second respondent passed a confiscation order, later withdrawn, and the petitioner appealed to the first respondent. The first respondent rejected the appeal without assigning reasons, leading to the petitioner filing a writ petition challenging the impugned endorsement.

The learned counsel for the petitioner argued that the first respondent failed to consider the material presented and rejected the appeal on unwarranted grounds, violating principles of natural justice. The learned A.G.A. for respondents conceded that no reasons were provided for rejecting the appeal and no opportunity was given to the petitioner before issuing the impugned endorsement. The High Court observed that the impugned endorsement was not a speaking order, as it lacked reasons and failed to consider the material presented by the petitioner. The first respondent's rejection of the appeal without proper consideration was deemed arbitrary and against principles of natural justice.

The High Court allowed the writ petition, setting aside the impugned endorsement and remitting the matter to the first respondent for reconsideration. The first respondent was directed to pass an appropriate order within three months, considering the appeal afresh and in accordance with the law. The judgment emphasized the importance of providing reasons and considering all relevant material before rejecting an appeal, highlighting the principles of natural justice that must be adhered to in such proceedings.