Mrs. Jatinder Kaur vs. Union Of INDIA

Sri. Govindraya Kamath, the learned counsel for the petitioner, is categorical that the petitioner would not pursue the petition insofar as the challenge to the statutory provisions and the Circulars but the petitioner’s grievance as against the initiation of proceedings and the confiscation order dated 05.02.2021 under Section 129 of the - 4 - KGST/CGST Act must be examined by this Court in the light of the petitioner’s categorical case that she has not connived in any manner with the Transporter in tax evasion.

Sri. Govindraya Kamath also submits that in terms of the liberty granted by this Court, the petitioner has filed an affidavit to demonstrate there cannot be allegations of connivance against the petitioner and after this affidavit, the proceeding dated 25.01.2023 is issued holding that the petitioner’s case cannot be accepted and opining that though the petitioner may not have herself hired the vehicle to the Transporter, ‘M/s. Meghdoot Logistic’, the vehicle is lent on hire through agent ‘M/s. Hindustan Road Lines’ and evasion of tax is borne out from the records. Sri. Govindraya Kamath canvasses that the proceeding dated 25.01.2023 is issued without taking into consideration the material circumstances and is based on certain materials that - 5 - are not even furnished to the petitioner, and in this regard, he points out a reference to the ‘Good Consignment Manifest vide Challan MF No.407’ as incorporated in the proceeding dated 25.01.2023. 4. As against these submissions, Sri. K Hemakumar, the learned Additional Government Advocate, submits that the petitioner, who is enjoined in law to discharge the burden of showing that there is no connivance, has filed a perfunctory affidavit only stating that she is the owner of the subject vehicle and she has no mechanism to verify the instructions issued by the Transporter when the vehicle is hired. This would be a very general statement, and general statements will not help the petitioner in discharging the burden of showing that there is no connivance; especially with the material on record indicating that she could be associated with M/s. Hindustan Road Lines.

On perusal of the records, including the proceeding dated 25.01.2023, Sri. K Hemakumar is called upon to respond as to whether there must be a further enquiry with due opportunity to the petitioner as in very similar circumstances, this Court has called upon the concerned respondent to extend a due opportunity by way of personal hearing and decide on the question of connivance. Sri. K Hemakumar submits that the fifth respondent could be directed to extend an opportunity of personal hearing to the petitioner or her duly authorized representative but observing that the fifth respondent shall be at liberty to consider not just the circumstances placed on record by the petitioner but also any deliberate attempt to withhold information. Sri. K Hemakumar submits that deliberate failure could be one of the circumstances that could be held against the petitioner while deciding on the question of connivance.

The connivance by the petitioner, who is the registered owner of the subject vehicle, in tax evasion could be a juri ictional question for imposition of a tax liability either under Section 129 or 130 of the CGST/KGST Act, and there must be complete adjudication on such question in a manner that would pass muster in law. If at the first instance, this question is not duly considered because the fifth respondent has relied upon certain material that is not known to the petitioner, there will not be complete adjudication.

As such, this Court is of the considered view that the fifth respondent must re-examine the afore question with due opportunity to the petitioner to respond to the material that the fifth respondent may rely upon against the petitioner. This Court must observe that the fifth respondent, while deciding the question of connivance, may also take