2024 (3) TMI 161 - HC - GST

Violation of principles of natural justice - impugned order passed without considering reply to the show cause notice of the petitioner and without giving any personal hearing to the petitioner - HELD THAT - It appears that the stand of the respondent authority in not granting the personal hearing to the petitioner is not tenable and is in complete breach of the principles of natural justice and as such, on that ground only, this petition is required to be allowed by quashing and setting aside the impugned order passed in Form GST MOV-11 and remand the matter back to the respondent No. 2 for fresh adjudication including to decide the application of the petitioner for provisional release within a period of one week from today. Petition disposed off.

Summary

Issues involved:
The issues involved in this case are related to the legality and arbitrariness of the impugned order u/s 130 of the GST Act, breach of principles of natural justice in not granting personal hearing to the petitioner, and the requirement for fresh adjudication by the respondent authority.

Impugned Order u/s 130 of the GST Act:
The petitioner, a partnership firm engaged in trading in aluminum scrap, filed a petition under Article 226 of the Constitution of India seeking to quash the impugned order in Form GST MOV-11. The respondent No. 2 had intercepted the conveyance due to alleged discrepancies in the invoice details, despite the E-way bill being valid. The petitioner made representations and requested the release of goods and conveyance. The respondent No. 2 issued notice in Form GST MOV-10 u/s 130 of the GST Act, relying on the driver's statement in Form GST MOV-1. The petitioner objected to the show cause notice but the respondent passed the impugned order without considering the petitioner's reply or granting a personal hearing. The petitioner argued for provisional release of goods as per Rule 140 of the GST Rules, citing a previous court decision. The High Court found the respondent's failure to grant a personal hearing as a breach of natural justice, quashed the impugned order, and remanded the matter for fresh adjudication with directions to decide on the application for provisional release within a week.

Breach of Principles of Natural Justice:
The petitioner contended that the impugned confiscation order was passed in violation of natural justice principles and contrary to a previous court ruling. The respondent claimed to have given the petitioner an opportunity to clarify the issues raised but stated that the petitioner did not respond adequately to a specific point regarding the purchase and dispatch place of the goods. The respondent decided not to grant a personal hearing based on this, which the petitioner argued was unjust. The High Court held that the respondent's refusal to grant a personal hearing was untenable and a clear breach of natural justice. Consequently, the impugned order was set aside, and the matter was remanded for fresh adjudication, emphasizing the importance of providing a personal hearing to the petitioner.

Fresh Adjudication by Respondent Authority:
The High Court, after hearing arguments from both parties, concluded that the respondent's stance of denying a personal hearing to the petitioner was unjust and violated natural justice principles. The Court did not delve into the merits of the case but focused on the procedural irregularity. Therefore, the impugned order in Form GST MOV-11 was quashed, and the matter was remanded to the respondent No. 2 for prompt reevaluation, emphasizing the necessity of granting a personal hearing to the petitioner. The Court directed the respondent to decide on the matter expeditiously after providing the petitioner with a personal hearing. As a result, the petition was disposed of with the aforementioned directives.