Sitaram Roadways (Urp) Through Proprietor Vashrambhai Arjanbhai Dangar vs. State Of Gujarat

Held

The Court held that the impugned order dated 24.08.2019 was in breach of the principles of natural justice on two counts. Firstly, the second respondent passed the order on 24.08.2019 without affording any opportunity of hearing to the petitioner, despite the notice requiring appearance on 28.08.2019. Secondly, the order was a non-speaking order, failing to provide reasons for the confiscation, which renders it unsustainable. The Court relied on various Supreme Court judgments emphasizing the necessity of reasoned orders and the right to be heard. Consequently, the impugned order was quashed and set aside. The matter was remitted to the proper officer for a fresh decision in accordance with law, after affording a reasonable opportunity of hearing to the petitioner. The Court also directed the release of the conveyance and goods upon the petitioner's deposit of tax and penalty, subject to the final outcome of the proceedings.

Facts

The petitioner, Sitaram Roadways, through its proprietor Vashrambhai Arjanbhai Dangar, filed a writ petition challenging an order dated 24.08.2019 passed by the second respondent (an authority under the GST Act). The order directed the confiscation of the petitioner's conveyance (vehicle number GJ-04-AT-9932) and the goods therein. The vehicle was intercepted on 06.08.2019 because the person in charge could not produce mandatory documents like invoices and e-way bills. A notice for confiscation and penalty under Section 130 of the CGST Act was issued on 21.08.2019, requiring the petitioner to appear on 28.08.2019. However, the confiscation order was passed on 24.08.2019, prior to the scheduled hearing. The petitioner later deposited the tax and penalty amount on 05.09.2019.

Key Issues

1. Whether the impugned order of confiscation passed by the second respondent under Section 130 of the CGST Act, 2017, is liable to be set aside for violation of the principles of natural justice, specifically the right to an opportunity of being heard, as mandated by Section 130(4) of the CGST Act? 2. Whether the impugned order is vitiated for being a non-speaking order, failing to provide reasons for the confiscation of goods and conveyance? Petitioner's Arguments: The petitioner argued that the confiscation order was passed in contravention of Section 130(4) of the CGST Act, which mandates an opportunity of hearing. The notice required appearance on 28.08.2019, but the order was passed on 24.08.2019 without affording any hearing. The petitioner also contended that the order was non-speaking, lacking reasons for confiscation. Revenue's Arguments: The learned Assistant Government Pleader submitted that the order was passed after due notice and that there was no warrant for interference. However, the AGP could not dispute that the order was passed before the scheduled date of hearing.