Whether detention order and confiscation of goods can be challenged on the ground that opportunity of hearing was not given?

PJ/Case Law/2018-2019/3497

Case:M/s BRIGHT ROAD LOGISTICS PVT LTD Vs THE COMMERCIAL OFFICER (ENF-21) SOUTH ZONE

Citation:Writ Petition No.47450 of 2018(T-RES)
Issue: Whether detention order and confiscation of goods can be challenged on the ground that opportunity of hearing was not given?
Brief facts:The petitioner is a transporter represented by its Proprietor and was transporting certain goods. The said conveyance bearing registration No.KA-07-A-8570 was checked by the officers of the Revenue Department. After a verification of the documents and goods in the conveyance, it was found that the consignment consisted of readymade garments worth of Rs.33,35,335/- and the said consignment was not accompanied by valid documents like tax invoice and e-way bill and the same was in contravention of the provision of Section 68(1) of the CGST Act, 2017 and KGST Act, 2017. On such basis the Revenue concluded that the same amounts to an attempt to avoid paying tax to the Government and same is liable to be levied as mandated under Section 129(1) of the CGST Act. The petitioner filed a writ petition in regard to the detention order dated 10.08.2018 issued under Section 129(1) of the Central Goods and Services Tax Act, 2017, the order of confiscation of goods and conveyance and demand of tax, fine and penalty dated 19.09.2018 issued under Section 130 of the CGST Act and the rectification order dated 25.09.2018 issued under Section 161 of the CGST Act, 2017

Appellant’s Contention:Petitioner contends that the order stands invalidated on the sole ground that there is non-compliance of the mandate under the provisions of Section 129(4) of the Act and hence the same warrant interference at the hands of this Court. It is contended that the order of detention under Section 129(1) of the CGST Act, the order of confiscation and rectification order to the writ petition have been passed without affording an opportunity of hearing to the petitioner.
It is further contended that the objections put forth by the petitioner had not been taken into consideration while passing the orders, which are impugned herein. The arguments put forth are required to be rejected for the following reasons:
1) The petitioner is a transporter; and
2) The detention and seizure order has been passed after verification of the documents that were made available by the driver of the conveyance and inspection of goods has been carried out in the presence of the driver.

Respondents Contention & Reasoning of judgment:As per order of demand of tax and penalty passed by CTO, it is apparent that the contention raised by the petitioner, that no opportunity hasbeen afforded under Section 129 (4) of the CGST Act stands falsified.

Moreover, a confirmation letter was given to CTO which signifies that the alleged owners have waived the right of hearing and have consented, levy of tax and penalty and have undertaken to pay as per the provisions of Section 129(1)(a) of the CGST Act. Despite the same, the petitioner has been heard in the matter.

This Court does not find any good ground warranting interference with the impugned orders by exercising its jurisdiction under Article 226 of the Constitution of India.

In the instant case, no declaration has been made by the consignees either prior to the commencement of transport or even after the goods has been seized. Hence, the case put forth by the petitioner does not inspire confidence in the Court to further adjudicate the issue. Hence, the said ruling is distinguishable and inapplicable to the instant case. The Court is of the opinion that the points raised by the petitioner does not survive for consideration in the light of the explanation
placed before this Court. As stated earlier, the matter requires adjudication of facts, which are seriously disputed by the parties. This Court in exercise of supervisory jurisdiction cannot enter upon and adjudicate factual issues under Article 226 of the Constitution of India, in the light of availability of an alternative remedy. Accordingly, the petition stands rejected.

Decision:Writ Petition stands rejected
Comment: According to proviso to section 107(9) of the CGST Act, 2017, pertaining to appeals to appellate authority, it is expressly stated that sufficient opportunity of hearing is required to be granted by the tax authorities and adjournment can be granted upto three times. However, in this case, the CTO has provided the opportunity of being heard in accordance with the principles of natural justice and the statutory provisions contained in CGST Act, 2017. Consequently, the petition was rejected after considering the submissions of the appellant.

Prepared By: Arundhati Bajpai

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PJ/Case Law/2018-2019/3497

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