Sfc Environmental Technologies Limited vs. Union Of INDIA

Held

The Court held that while writ petitions are generally not entertained against orders of seizure and confiscation, the present case presented a distinct issue concerning the violation of principles of natural justice and statutory procedural requirements. The Court found that the show cause notice was issued on October 29, 2024, and the order confirming the penalty was passed on November 5, 2024, which falls within the seven-day period stipulated in Form GST MOV-07 for responding to the notice. This was considered a clear procedural violation and a breach of natural justice, as the petitioner was not given adequate opportunity to present their case. Consequently, the order of penalty dated November 5, 2024, was set aside. The matter was remanded back to the 4th respondent to pass fresh orders after providing the petitioner with due opportunity of hearing and making out their case, in accordance with the law. The Court explicitly found a violation of the minimum period granted under the notice.

Facts

The petitioner, SFC Environmental Technologies Limited, engaged in environmental technology solutions, had goods in transit from Telangana to Karnataka stopped by the 4th respondent in Andhra Pradesh. A penalty was paid, and the goods and vehicle were released. Subsequently, the 4th respondent issued a show cause notice on October 29, 2024, proposing to confirm the collected penalty. The petitioner responded on October 31, 2024, arguing that the statutory seven-day period for response had not elapsed, yet personal hearing notices were issued. The 4th respondent passed an order on November 5, 2024, confirming the penalty, leading the petitioner to file this writ petition.

Key Issues

1. Whether the writ petition is maintainable against an order of seizure and confiscation, considering the Division Bench judgment in W.P.No.2260 of 2022 and the Supreme Court's decision in State of Uttar Pradesh & others vs. M/s. Kay Pan Fragrance Pvt. Ltd.? 2. Whether the petitioner was afforded adequate opportunity to respond to the show cause notice, particularly concerning the statutory seven-day period stipulated in Form GST MOV-07 under Section 129(3) of the CGST Act, thereby violating principles of natural justice? Petitioner's arguments: The petitioner contended that the writ petition is maintainable because the core issue involves violations of natural justice and the statutory minimum response period. They argued that the seven-day period prescribed in Form GST MOV-07 was not adhered to, as the order was passed before its expiry. Respondent's arguments: The respondent argued that the writ petition is not maintainable, citing a Division Bench judgment that directs parties to avail regular remedies under the Act against orders of seizure and confiscation.