M/S Lakshay Logistics vs. State Of Gujarat

Held

The Court held that the confiscation order dated 16.03.2020 was in violation of Section 130(4) of the GST Act. Section 130(4) mandates that no order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard. The Court found that the notice produced by the revenue was addressed to the consignor and not to the petitioner, who is the owner of the conveyance. Therefore, the petitioner was not afforded an opportunity of hearing, which is mandatory. The Court reasoned that the confiscation order has serious civil and financial consequences, and thus, adherence to the principles of natural justice, including providing an opportunity to be heard, is crucial. The Court quashed the confiscation order and remanded the matter to the competent authority to pass a fresh order in accordance with law after affording an opportunity of hearing to the parties concerned. The Court explicitly stated that it had not gone into the validity of the notice or the detention order, and the petitioner was free to raise all objections in response to any fresh show cause notice.

Facts

The writ petitioner, M/s. Lakshy Logistics, a proprietorship firm registered in Rajasthan for GST purposes, was hired by Rifty Vinimay Enterprises to transport goods. The petitioner's truck (RJ-19-GG-4057) was detained, and proceedings were initiated for detention and confiscation under the GST Act due to noticed discrepancies. The petitioner challenged the detention order dated 05.01.2020, the detention/confiscation notice dated 16.01.2020 (Form GST MOV-10), and the confiscation order dated 16.03.2020 (Form GST MOV-11). A key contention was that the petitioner, as the owner of the conveyance, was not served with any notice before the confiscation order was passed. The revenue produced a notice dated 16.01.2020, but it was addressed to Rifty Vinimay Enterprises, not the petitioner.

Key Issues

1. Whether the confiscation order dated 16.03.2020 passed under Section 130 of the GST Act is liable to be quashed for non-service of notice to the owner of the conveyance, thereby violating the principles of natural justice and Section 130(4) of the GST Act. Petitioner's Contention: The petitioner argued that it was never served with any notice before the confiscation order was passed on 16.03.2020 in Form MOV-11, and therefore, it was not afforded an opportunity of being heard. Revenue's Contention: The revenue submitted a notice dated 16.01.2020 (Form GST MOV-10) purportedly served upon the petitioner. However, upon perusal, the notice was addressed to Rifty Vinimay Enterprises, the consignor, and not to the petitioner, M/s. Lakshy Logistics, the owner of the vehicle.