2024 (3) TMI 59 - HC - GST

Challenge to seizure order - seizure of 540 bags of Gambier - it is submitted that seizure of goods have been effected not on the strength of the original show cause notice dated 05.02.2024, but on the strength of reasoning and grounds with which petitioner was never confronted - HELD THAT - Prima facie it does appear that the fact allegation on account of which, the show cause notice was originally issued had been duly explained by the petitioner. Adverse inference does not appear to have been drawn on those grounds. Rather fresh grounds have been culled out by the revenue authority. The revenue authority ought to have given a fresh notice to the petitioner to disclose the new grounds for the proposed seizure before the impugned order may have been passed. Failure to provide such opportunity has resulted in the impugned order being passed in denial of the rules of natural justice. To that extent, no useful purpose may be served in relegating the petitioner to the forum of alternative remedy. Petitioner may treat the impugned order to be the final show cause notice - Petitioner may file reply thereto within a period of one week - Petition disposed off.

Summary

Issues Involved:
Challenge to seizure order under Section 129 of U.P. GST Act, 2017 based on lack of confrontation with new grounds and revalidation of E-Way bills.

Issue 1: Lack of Confrontation with New Grounds
The petitioner challenged the seizure order dated 15.02.2024 on the basis that it was effected without informing the petitioner of the reasoning and grounds, specifically regarding the revalidation of E-Way bills. The petitioner argued that they were not given the opportunity to explain or address this new information, which was a violation of natural justice principles.

Issue 1 Details:
The petitioner contended that the seizure was not based on the original show cause notice dated 05.02.2024, but on undisclosed grounds. It was argued that the discrepancy in the E-Way bills was explained with evidence provided by the software provider of the transporter. The petitioner emphasized that they should have been given a chance to respond to these new grounds before any seizure was made.

Issue 2: Violation of Natural Justice
The High Court observed that the revenue authority did not provide the petitioner with a fresh notice to disclose the new grounds for the proposed seizure before passing the impugned order. This failure to follow the principles of natural justice led to the conclusion that the impugned order was passed in denial of these rules, thereby necessitating intervention by the Court.

Issue 2 Details:
The Court noted that the original grounds for the show cause notice had been explained by the petitioner, and no adverse inference was drawn on those grounds. However, new grounds were introduced by the revenue authority without giving the petitioner an opportunity to respond. This lack of procedural fairness led the Court to determine that the impugned order was invalid due to the denial of natural justice.

Decision:
The High Court disposed of the writ petition with specific directions to address the lack of confrontation with new grounds and the violation of natural justice. The Court directed the petitioner to treat the impugned order as the final show cause notice, allowing them to file a reply within a week. The revenue authority was instructed to provide an opportunity to the petitioner on 11.03.2024 and to pass an appropriate order by 15.03.2024, ensuring compliance with the principles of natural justice and procedural fairness.