GST Update No 340 on SCN issued to driver in case of detention of goods

The departmental officers often intercept, detain and seize the goods without following the prescribed procedural norms which result into gross violation of the provisions of statue on one hand and harassment of taxpayers on the other hand. Resultantly, there had been various situations wherein the Courts have stepped down to provide relief to the taxpayers. However, recently, one case was reported before Madras High Court on similar grounds in the case of M/S RAMKI CEMENTS PRIVATE LIMITED. The decision imparted in this case is subject matter of discussion of our present update.

The petition was filed seeking Writ of Mandamus and to quash the impugned penalty order and to release the goods of the petitioner. In the present case, the petitioner is having branch office at Tamil Nadu which was established recently and GST registration of the same was also obtained. However, mistakenly, in the consignment being transported the address of Chennai office was mentioned. Upon interception, a show cause notice to the driver was issued which was not received by the petitioner. Hence, no reasonable opportunity of being heard was provided to the petitioner. Further, it was submitted that impugned order was passed on the same day i.e. 21.10.2022 on which notice on e-mail was received.

The counsel of Government argued that issuing notice to driver is sufficient compliance under GST Act. Furthermore, e-mail notice was also issued on 21.10.2022.

The Court heard both the sides and observed that petitioner was not awarded with adequate opportunity of being heard since no show cause notice issued to them. Further, the show cause notice issued to the driver was also inappropriate. Hence, the impugned order was set aside. It was therefore directed to issue fresh notice to the petitioner and thereafter the petitioner shall submit the objections. The order will then be passed by the respondent within a period of 8 weeks.

The above decision is once again a silver lining in the clouds wherein there was clearcut violation of principles of natural justice. To streamline the procedure of detention and seizure and put an end to unwanted litigations, recently Kerala Government issued a Circular addressing all these issues vide Circular No. 10/2022 dated 10.11.2022 which was covered in our GST Update No. 339 It is high time that these decisions and binding circulars are followed while issuing orders.

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GST Update No 340 on SCN issued to driver in case of detention of goods

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