M/S. Sfc Environmental Technologies Limited vs. Union Of INDIA

Held

The Court held that the Writ Petition was maintainable in this case, distinguishing it from the precedent cited by the revenue. The Court found that the 4th respondent committed a clear procedural violation by issuing the order of penalty on 05.11.2024, which was within the seven-day period provided under Form GST MOV-07 for the petitioner to answer the show cause notice dated 29.10.2024. This also amounted to a violation of the principles of natural justice, as the petitioner was not given adequate opportunity to present their case. Consequently, the Court set aside the order of penalty dated 05.11.2024 and remanded the matter back to the 4th respondent. The 4th respondent was directed to pass necessary orders after providing the petitioner with due opportunity of hearing and making out their case, in accordance with the law. The Court allowed the Writ Petition without costs.

Facts

The petitioner, M/s. Sfc Environmental Technologies Limited, a business providing environmental technology solutions, placed an order for components manufactured in Telangana. These components were being transported to a customer in Karnataka. The goods were stopped in Andhra Pradesh by the 4th respondent, who initiated proceedings for seizure and confiscation. The petitioner paid the penalty to secure the release of the goods and vehicle. Subsequently, the 4th respondent issued a show cause notice dated 29.10.2024, proposing to confirm the penalty already paid. The petitioner responded on 31.10.2024, arguing that the seven-day period statutorily available for response had been curtailed. The 4th respondent then passed an order dated 05.11.2024, confirming the penalty. The petitioner filed a writ petition challenging this order.

Key Issues

1. Whether the Writ Petition is maintainable against an order of seizure and confiscation, or should the petitioner be relegated to statutory remedies? - Petitioner's argument: The petitioner contended that the Writ Petition is maintainable because the core issues involve violations of the principles of natural justice and the statutory minimum period for responding to a show cause notice. - Respondent's argument: The learned Government Pleader for Commercial Taxes argued that the Writ Petition is not maintainable, citing a Division Bench judgment of the High Court which followed a Supreme Court judgment, holding that writ petitions should not be entertained against orders of seizure and confiscation, and that petitioners should pursue regular remedies under the Act. 2. Whether the principles of natural justice and the statutory period for response to a show cause notice were violated? - Petitioner's argument: (Implicit in the facts and the court's finding) The petitioner argued that the seven-day period statutorily available to respond to the show cause notice was violated, and adequate opportunity was not provided, thus violating principles of natural justice. - Respondent's argument: Not recorded.