M/S Mahalaxmi Rexine And Metal Traders vs. State Tax Officer (2)

Held

The Court held that the confiscation order passed by the respondent authority in Form GST MOV-11 was in breach of the principles of natural justice. The Court noted that the writ-applicant was directed to appear before the authority on April 5, 2019, at 11:00 a.m. for a hearing. However, the impugned order of confiscation was passed on the very same day, April 5, 2019, without providing the writ-applicant with a reasonable opportunity to be heard. Based on this ground alone, the Court found it necessary to quash the confiscation order. The Court's reasoning was that a hearing requires a proper opportunity to present one's case, which was not afforded when the order was passed concurrently with the scheduled hearing date. The ratio decidendi is that an order passed on the same day as the scheduled hearing, without allowing for the presentation of arguments, violates natural justice.

Facts

The petitioner, M/s Mahalaxmi Rexine and Metal Traders, a registered entity under the Gujarat Goods & Service Tax Act, 2017, engaged in metal scrap trading, had its goods seized during transit. The seizure occurred because the driver of the transport vehicle, owned by the second petitioner, failed to produce an E-way Bill at the time of inspection, although a tax invoice and LR were available. This led to proceedings under Section 129 of the Act, culminating in a confiscation order (Form GST MOV-11) passed by the State Tax Officer. The petitioner challenged this order, arguing a breach of natural justice as the order was passed on the same day they were summoned for a hearing.

Key Issues

1. Whether the confiscation order passed by the respondent authority in Form GST MOV-11 was in breach of the principles of natural justice, specifically regarding the opportunity of hearing provided to the writ-applicant? The petitioner argued that they were summoned for a hearing on April 5, 2019, and the impugned confiscation order was passed on the very same day, without affording them a reasonable opportunity to present their case. They relied on the fact that their reply was filed on April 4, 2019, and they were informed that the hearing would take place on April 8, 2019, but the order was prematurely issued. The respondent authority's argument was not explicitly recorded in the judgment regarding the specific issue of natural justice, but their participation in the proceedings and the issuance of the order implied a contention that due process was followed.