M/S. P.N Tobaco Through Its Authorized Signatory Parth Nalinbhai Patel vs. State Of Gujarat

Held

The Court held that the final order of confiscation passed in Form GST MOV-11 dated 25th July, 2020, was liable to be quashed and set aside. The primary reason for this decision was the failure of the authority concerned to provide the writ applicant with an opportunity of hearing before passing the final order. The Court found that a show-cause notice was issued, but the final order was passed on the same day, precluding any response or hearing. The Court emphasized that this procedural lapse violated the principles of natural justice. The ratio decidendi is that a confiscation order under Section 130 of the GST Act, 2017, cannot be passed without adhering to the principles of natural justice, including providing a reasonable opportunity of being heard to the affected party. The Court quashed the impugned order and remitted the matter back to the authority for a fresh hearing.

Facts

M/s. P.N. Tobaco, a GST-registered entity, was transporting 14694 Kgs of tobacco. While the goods were in transit, a mobile squad of the State Tax Officer intercepted the vehicle. The squad noted that the driver had not tendered any documents, the tendered documents were defective, the genuineness of the goods and documents required verification, and an e-way bill was not provided. Consequently, a show-cause notice in Form GST MOV-10 was issued to the petitioner on July 25, 2020, asking why the goods and conveyance should not be confiscated under Section 130 of the GST Act, 2017. Before the petitioner could respond, the final order of confiscation in Form GST MOV-11 was passed by the respondent No. 2 on the same date.

Key Issues

1. Whether the order of confiscation passed in GST MOV-11 dated 25.07.2020 by the respondent No.2 is liable to be quashed and set aside for violation of principles of natural justice, specifically the right to a hearing, under Section 130 of the GST Act, 2017? The petitioner argued that the final order of confiscation was passed without affording them an opportunity of hearing, despite a show-cause notice being issued. They contended that this procedural lapse violated the principles of natural justice. The revenue or State did not record any arguments in the judgment.