M/S Rishi Stonex vs. The State Of Assam And 5 Others

Facts

The petitioner, M/s Rishi Stonex, a consignee of goods transported by Respondent No. 4, filed a writ petition challenging the detention of its goods. The goods were intercepted by Assam State GST officials at Amingaon Railway Yard due to suspicion of undervaluation and underweight declarations. The petitioner claimed its three containers were compliant with IGST Act provisions. The authorities issued a notice to the transporter (Respondent No. 4) for penalty, but not to the petitioner. The petitioner's grievance was the non-issuance of a show cause notice to it, preventing it from explaining the genuineness of its purchases. The High Court had previously directed that no auction of goods should take place and allowed the State GST Department to issue notice to the petitioner.

Held

The Court held that the writ petition could be disposed of by directing the issuance of a fresh notice to the petitioner. The Court acknowledged that the dispute revolved around whether the goods were undervalued or underweight, an aspect that the petitioner could address by providing necessary documents. Therefore, the Court directed the Assistant Commissioner of State Tax, Guwahati Zone, to issue a fresh show cause notice to the petitioner within 15 days, similar to the one issued to the transporter. Upon receiving the reply and documents from the petitioner, the Assistant Commissioner was to decide the proceedings in accordance with the AGST Act, 2017, and IGST Act, 2017. The petitioner was granted liberty to approach the appropriate forum if aggrieved by the decision. The Court did not decide on the merits of the undervaluation or underweight allegations but focused on ensuring procedural fairness.

Key Issues

1. Whether the Petitioner, as a consignee, was entitled to be issued a show cause notice before any action was taken under Section 129 of the Assam Goods and Services Tax Act, 2017, concerning the detention of goods suspected of undervaluation or underweight declarations, thereby violating principles of natural justice? Petitioner's Argument: The petitioner contended that as the consignee, it should have been issued a show cause notice to present its case and demonstrate that the goods were not undervalued, underweight, or involved in tax evasion. The failure to issue such a notice prejudiced its rights. Revenue's Argument: The respondents, through an instruction placed before the court, indicated that the detention was for verification. They stated that the transporter admitted fault for not uploading Part-B of the e-way bill, and thus, notice was issued only to the transporter. They did not explicitly argue against the petitioner's right to a notice but implied that the initial action was taken based on the transporter's admission.