M/S Calcutta South Transport Co. vs. State Of U.P. And 3 Others

Held

The Court held that the show cause notice in Form GST MOV-10 dated 23.12.2020 was defective because the specified appearance date of 28.11.2020 predated the notice itself. This defect, the Court found, constituted a violation of the principles of natural justice and prejudiced the petitioner by denying them a proper opportunity to present their case and file a reply. The Court emphasized that the principles of natural justice are mandatory and their violation, especially when leading to civil consequences, requires adherence to procedural requirements like proper notice and hearing. The Court noted that the petitioner had made efforts to lodge an FIR and that the driver's signature on Form GST MOV-4 did not negate the need for a proper show cause notice to the owner. Consequently, both the order of confiscation dated 29.11.2020 and the appellate order dated 28.06.2021 were quashed. However, in the interest of justice, the respondents were given the liberty to issue a fresh show cause notice and proceed according to law. The issue of whether the petitioner had knowledge or connivance was not finally decided, as the proceedings were set aside due to procedural defects.

Facts

The petitioner, M/s Calcutta South Transport Co., filed a writ petition challenging the confiscation of its vehicle (registration No. HR 55 S 1171) and the imposition of penalty by an order dated 29.11.2020 (Form GST MOV-11). This order followed the seizure of goods and the conveyance on 08.10.2020 and 14.10.2020 by the Assistant Commissioner (Mobile Squad), Agra, who found undeclared goods being transported. The petitioner's appeal against the confiscation order was dismissed on 28.06.2021. The petitioner argued that the show cause notice (Form GST MOV-10) dated 23.12.2020 had a prior appearance date of 28.11.2020, violating principles of natural justice. The petitioner also claimed no knowledge or connivance regarding the undeclared goods and had attempted to lodge an FIR against the transporter.

Key Issues

1. Whether the show cause notice in Form GST MOV-10 dated 23.12.2020, which stated an appearance date of 28.11.2020, was in violation of the principles of natural justice and Section 130(4) of the U.P. Goods and Services Tax Act, 2017, thereby rendering the subsequent confiscation order illegal? Petitioner's arguments: The petitioner contended that the show cause notice was fundamentally flawed due to the incorrect and predating appearance date, violating principles of natural justice and Section 130(4) of the Act. They argued that this prevented them from presenting their case and proving lack of knowledge or connivance as required by Section 130(1)(v). They relied on the principle that an opportunity of hearing is mandatory before any decision with civil consequences is taken. Respondent's arguments: The respondent argued that while the counter-affidavit did not address the non-compliance with Section 130(4), the Court should not interfere under Article 226. They pointed to the driver's signature on Form GST MOV-4 after physical verification and argued that the petitioner's conduct did not warrant indulgence. They also suggested that the appellate order was passed in accordance with the statute.