2022 (4) TMI 351 - HC - GST

Seeking release of detained goods alongwith the vehicle - allegation is that some of the goods loaded in the truck are over and above the goods covered by invoices - Section 130 of the CGST/UPGST Act, 2017 - order of Confiscation passed without affording any opportunity of hearing to the petitioner - violation of principles of natural justice - HELD THAT - Once the order of confiscation dated 29.11.2020 and the order of first appellate authority dated 28.06.2021 were quashed by this Court by judgment dated 15.11.2021, the order of confiscation stood eclipsed from the very date of issuance. There is no order of confiscation in existence and, yet, the truck of the petitioner is being unauthorisedly and illegally detained by the respondent no.2. About 18 months have passed since the detention of the aforesaid truck without any valid order for confiscation or any proceeding of confiscation in existence, yet, the truck in question is being detained by the respondent no.2 arbitrarily, illegally and un-authorisedly, resulting in harassment of the petitioner. It is settled law that if a public functionary acts maliciously or oppressively and the exercise of power results in harassment and agony then it is not an exercise of power but its abuse. No law provides protection against it. Harassment by public authorities is socially abhorring and legally impermissible which causes more serious injury to society. In modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention for compliance of order of this Court, linger on leaving the petitioner to run from one end to other with no result. Therefore, award of compensation for unauthorised, arbitrary and illegal detention of the truck of the petitioner by the respondent authorities would not only compensate the petitioner for loss suffered by him but it would also help in improving work culture and public confidence in rule of law. Thus, as per pleadings, the petitioner is suffering financial loss of ₹ 5000/- per day since the date of detention of truck, i.e. 14.10.2020. Since determination of loss due to arbitrary, illegal and unauthorised detention by the respondent no.2, is a question of fact, therefore, the Commissioner of Commercial Tax, U.P., Lucknow is directed to determine the financial loss of the petitioner in respect of the truck in question, within three weeks from today after affording opportunity of hearing to the petitioner and pay it to the petitioner within next one week through account payee bank draft. The respondents are directed to release forthwith the truck bearing registration no.HR 55 S 1171 - petition allowed.

Summary

Issues Involved:
1. Legality of the detention and confiscation of the petitioner's truck.
2. Compliance with principles of natural justice.
3. Determination of financial loss due to illegal detention.
4. Compensation for arbitrary and unauthorized actions by public authorities.

Detailed Analysis:

1. Legality of the Detention and Confiscation of the Petitioner's Truck:
The petitioner, the owner of truck HR 55 S 1171, leased it to a transport company for a trip from Delhi to Vijayawada. During transit through Uttar Pradesh, the truck was detained by the Assistant Commissioner (Mobile Squad) for carrying goods beyond those covered by invoices. A detention order dated 14.10.2020 was issued, followed by proceedings under Section 130 of the CGST/UPGST Act, 2017 for confiscation. Despite the petitioner’s attempts to clarify the situation and request the truck's release, an order of confiscation was passed on 29.11.2020 without granting the petitioner a hearing.

2. Compliance with Principles of Natural Justice:
The court found that the show cause notice dated 23.12.2020 was misleading and incorrect, failing to provide the petitioner with a fair opportunity to respond. The notice's date for appearance was erroneously stated as 28.11.2020, causing confusion. The court emphasized that the principles of natural justice were not followed, as the petitioner was not given a proper opportunity to be heard, violating sub-section (4) of Section 130 of the Act. Consequently, the orders of confiscation and the appellate authority were quashed.

3. Determination of Financial Loss Due to Illegal Detention:
The court noted the petitioner's claim of financial loss due to the truck's detention since 14.10.2020, amounting to ?5,000 per day. The court directed the Commissioner of Commercial Tax, U.P., Lucknow, to determine the financial loss within three weeks, after providing the petitioner an opportunity to be heard, and to compensate the petitioner accordingly within one week through an account payee bank draft.

4. Compensation for Arbitrary and Unauthorized Actions by Public Authorities:
The court highlighted that the continued detention of the truck without a valid confiscation order was arbitrary, illegal, and unauthorized, causing harassment to the petitioner. It underscored that public authorities acting maliciously or oppressively constitute an abuse of power. The court imposed a cost of ?5,000 on the respondents for their arbitrary actions, to be deposited with the High Court Legal Services Committee, Allahabad. The court also ordered the immediate release of the truck.

Conclusion:
The writ petition was allowed with costs. The respondents were directed to release the truck immediately and compensate the petitioner for the financial loss incurred due to the illegal detention. The court's decision underscored the importance of adhering to principles of natural justice and the accountability of public authorities in exercising their powers.