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TMI Blog2023 (12) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Adjudicating Authority in light of the e-way bill being valid till then in respect of the first vehicle. He has to deal with the defence raised by the defaulter by a reasoned order. That is the mandate of Section 129 (3) and (4) of the Act of 2017 read together. The Adjudicating Authority has not done so. The Appellate Authority has also overlooked such fact. Respondent has not contended that, the defence canvassed in the show cause notice and the grounds pressed in the appeal were not canvassed or pressed by the appellant at the time of hearing before the Adjudicating or the Appellate Authority. It is found that the impugned order of the Adjudicating Authority as upheld by the Appellate Authority to have violated the principles of natural justice, inasmuch as it has not spoken on the defence taken. Consequently, both the orders passed by them are set aside - Adjudicating Authority under the Act of 2017 is directed to decide on the show cause notice, in light of the reply to the show cause notice dated June 22, 2022, afresh after giving an opportunity of hearing to the appellant through its authorized representative - application disposed off. - HON'BLE JUDGES DEBANGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal), 2023 Volume 110 GSTR 179 (Cal) (SB) (Hanuman Ganga Hydroproject Private Limited vs. Joint Commissioner, State Tax, Authority Siliguri Circle and Another), 2023 Volume 113 GSTR 191 (Cal) (Sunil Yadav vs. Assistant Commissioner, Bureau of Investigation (North Bengal Headquarters and Ors.), 2023 Volume 108 GSTR 366 (Cal) (Ramji Jaiswal and Anr. Vs. State Tax Officer, Bureau of Investigation (South Bengal), Kharagpur Zone and Ors.), unreported decision of the Single Bench passed in WPA 178 of 2023 (Pushpa Devi Jain vs. Assistant Commissioner of Revenue, Bureau of Investigation North Bengal Headquarter and Others), 2023 Volume 113 GSTR 189 (Cal) (DB) (Pushpa Devi Jain vs. Assistant Commissioner of Revenue, Bureau of Investigation, North Bengal Headquarter and Others). 6. Learned advocate appearing for the appellant has relied upon 2022 Volume 97 GSTR 218 (SC) (Assistant Commissioner (ST) and Others vs. M/s. Satyam Shivam Papers Pvt. Limited Anr.) and 2021 Volume 92 GSTR 154 (Satyam Shivam Papers Pvt. Ltd. Vs. Asst. Commissioner (ST) and Others) and contended that, provisions of Section 129 of the Act of 2017 had been construed therein and it was held that, explanation for non-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant had appointed a transporter and handed over the consignment along with relevant documents and e-way bill to the transporter for delivery. 12. In e-way bill, as is required, the registration number of the vehicle transporting the goods had been registered. 13. The appellant has claimed that when the vehicle carrying the goods reached Jatiakali on National Highway 27 District, Jalpaiguri on June 19, 2022, it encountered a technical and mechanical failure preventing it from further movement. Consequently, the driver of the vehicle had in his wisdom decided to load the goods on another truck obviously bearing a different registration number. The appellant has claimed that, the driver of the first vehicle was ignorant of the legal requirements and therefore, did not initiate the process of generating a further e-way bill. 14. The Respondent No. 1 had detained the new vehicle with the goods of the appellant. The Respondent No. 1 had issued a pre-printed recorded statement of the driver in Form GST Mov-01, dated June 19, 2022. The Respondent No. 1 had ordered for vehicle verification of the goods and documents in Form GST MOV-02. The Respondent No. 1 had carried out physical verificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and deliberate and since no specific material with regard to the intention of the delinquent for evading tax was placed, proceeded to grant relief to the delinquent. The judgement of the single Judge had been assailed in appeal and the Division Bench in Assistant Commissioner, State Tax Durgapur Range, West Bengal (supra) although did not interfere with the relief granted by the learned Single Judge in Ashok Kumar Sureka (supra) proceeded to observe that, such decision have been rendered on the peculiar facts of the case and cannot be treated as a precedent. 22. Therefore, in our view, the appellant before us cannot take the assistance of the ratio of Ashok Kumar Sureka (supra) as upheld in appeal, as the Appeal Court therein has directed that the same should not be treated as a precedent. 23. In Pushpa Devi Jain (supra) the Single Bench has dismissed the writ petition, where, a challenge was thrown to the order passed by the Adjudicating Authority under Section 129 (3) of the Act of 2017 affirmed by the Appellate Authority. In appeal, the Division Bench has set aside the order of the Adjudicating Authority and the Appellate Authority including the order of the single Bench findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with any guilty intention or not. In none of these three authorities the Supreme Court had the occasion to consider the provisions of the Act of 2017. 28. The Supreme Court, has considered the provisions of Section 129 of the Act of 2017 in Assistant Commissioner (ST) Ors. (supra). It has approved the view of the Telengana High Court rendered in M/s Satyam Shivam Papers Pvt. Limited Anr. (supra). 29. The Telengana High Court in M/s Satyam Shivam Papers Pvt. Limited Anr. (supra) has construed provisions of Section 129 of the Act of 2017 and held that, it was duty of the Adjudication Authority to consider the explanation offered by the defaulter. The High Court had found that there was no material before the Adjudication Authority to come to the conclusion that there was evasion of tax by the defaulter merely on account of the lapse of time mentioned in the e-way bill since, the Adjudicating Authority had no evidence of attempt to sell the goods to somebody else. It has held that, on account of non-extension of the validity of the e-way bill by the defaulter, no presumption can be drawn that there was an intention to evade the tax. Moreover, it was the duty of the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130: Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer. 31. Sub-Section (1) of Section 129 of the Act of 2017 has specified that goods and conveyance shall be liable to detention and seizure if the goods were in transit in contravention of the provisions of the Act of 2017 or the Rules made there under. It has also prescribed that, goods once detained or seized shall be released on payment of penalty for the amount specified in respect of the eventualities laid down therein. 32. Sub-Section (3) of Section 129 has laid down that, the proper officer detaining or seizing the goods or conveyance shall issue a notice of detention or seizure specifying the penalty payable and thereafter pass an order for payment of penalty. Sub-Section (4) has specified that no penalty shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 129 (3) and (4) of the Act of 2017 require compliance with the provisions of principles of natural justice prior to pronouncement of an order of penalty. Requirement of compliance with the principles of natural justice before passing an order of penalty ipso facto means that, the Adjudicating Authority has the jurisdiction to evaluate the merits of the defence taken and speak thereon. The mechanism provided under Section 129 of the Act of 2017 allows the Adjudicating Authority to accept the explanation given by a defaulter in given facts and circumstances and not to impose a penalty. The Adjudicating Authority has to consider the mitigating and aggravating circumstances, after affording the defaulter an opportunity of hearing and arrive at the finding whether there was a violation requiring imposition of penalty or not. Imposition of penalty cannot be said to be automatic given the mechanism provided for by the legislature in Section 129 (3) and (4) by affording an opportunity of hearing to the defaulter before imposition of the penalty. 37. By virtue of the authoritative pronouncement of the Supreme Court in Shriram Mutual Fund and Another (supra), Guljag Industries (supra) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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