Sakeel vs. State Tax Officer, Office Of State Tax Officer

Held

The Court held that the order passed by the respondent authorities was without application of mind and in a mechanical fashion, failing to consider the petitioner's representation and objections. The Court found that the requirement of Section 129(4) and (5) of the Act, which mandates an opportunity of being heard and consideration of objections, had not been followed. The impugned order was not a speaking order. Therefore, the Court set aside the order passed under Section 129(3) and further proceedings under Section 130. The respondents were directed to give a fair opportunity of hearing to the petitioner, including a personal hearing, and to consider all supporting documents. The Court also directed the respondents to release the seized goods in terms of Rule 140 of the Central Goods and Service Tax Rules, 2017, upon the petitioner furnishing security in the form of a bank guarantee equivalent to the applicable tax, interest, and penalty. The petitioner was granted liberty to file an appeal under Section 107 if further aggrieved.

Facts

The petitioner, Sakeel, received a show cause notice under Section 129 of the Rajasthan Goods and Service Tax, 2017. The petitioner submitted a representation stating that the goods and the bag containing receipts had been stolen. However, the respondent authorities proceeded to pass an order under Section 130, stating that the petitioner had neither appeared nor submitted objections, despite objections being on record. The petitioner filed a writ petition challenging this order. The goods seized were perishable and had been lying with the respondents since May 2015. The petitioner was willing to furnish security or a bank guarantee in lieu of the goods.

Key Issues

1. Whether the order passed under Section 130 of the Rajasthan Goods and Service Tax, 2017, is a speaking order, considering the petitioner's representation about stolen goods and the alleged non-consideration of objections? (Question of law and fact, turning on Section 129(4) and Section 130 of the Act). Petitioner's arguments: The order was passed mechanically without application of mind and without considering the petitioner's detailed representation regarding the theft of goods. The respondent authorities failed to follow the mandatory requirement of providing an opportunity of being heard as stipulated in Section 129(4) of the Act. The order under Section 130 was passed without proper consideration of the objections filed. Respondent's arguments: The respondent counsel submitted that it would be difficult to recover the amount if a security bond was accepted and that the truck and goods could be released on submission of a bank guarantee.