2018 (2) TMI 1737 - HC - GST

Court Rules Seizure Order Not Appealable; Writ Petition Appropriate

M/s RK Overseas Versus Union Of India And 3 Ors

The court held that the order of seizure under Section 129(1) of the U.P. Goods and Service Tax Act was not appealable, making a writ petition the ... Maintainability of petition - appealable order or not? - seizure of the goods in transit or storage - Section 129(1) of the UPGST Act, 2017 - Held that:- On the conjoint reading of Sections 107 and 121 of the Act it is apparent that though all orders passed under the Act by the adjudicating authority are appealable but not the one's which have been specifically excluded from the purview of appeal under Section 121 of the Act such as orders pertaining to seizure - the order of seizure of the goods in transit or storage passed under Section 129(1) of the Act is not appealable and therefore, a writ petition is maintainable against it subject to the limitations of judicial review. In the instant case, the goods in transit have been seized for the reason that the authorities are of the opinion that the goods have originated from New Delhi and as such amounted to interstate transaction - the finding has been returned, without hearing - Prima facie the recording of the aforesaid finding for the purposes of seizure is in the nature of adjudication which cannot be done without opportunity of hearing to the party concerned. Matter requires consideration - List the petition for admission/final disposal immediately thereafter. Issues:1. Appealability of order of seizure under Section 129(1) of the U.P. Goods and Service Tax Act, 2017.2. Validity of seizure of goods in transit based on origin of goods and value suppression.3. Requirement of opportunity of hearing before passing seizure order.4. Directions for release of goods along with the vehicle pending further proceedings.Analysis:1. The judgment addresses the issue of the appealability of an order of seizure under Section 129(1) of the Act. The court notes that while most orders passed under the Act are appealable, Section 121 specifically excludes certain orders from appeal, including those pertaining to seizure. The court concludes that the order of seizure in this case falls under the non-appealable category, making a writ petition the appropriate remedy subject to judicial review limitations.2. The court examines the grounds for the seizure of goods in transit, which were alleged to have originated from New Delhi instead of Ghaziabad as claimed. It is highlighted that the value of the goods was also contested based on discrepancies in documentation. The court observes that the decision to seize the goods on these grounds without proper opportunity of hearing raises concerns regarding the nature of adjudication involved, emphasizing the need for a fair hearing before such actions are taken.3. The judgment emphasizes the importance of providing an opportunity of hearing before making decisions such as seizing goods in transit. The court indicates that the authorities' reliance on secret information and loose papers to dispute the origin of the goods, disregarding accompanying documents, may not suffice as a proper adjudication process. This lack of opportunity for the affected party to present their case is deemed a crucial aspect requiring further consideration.4. Lastly, the court issues directions for the release of the goods and the vehicle pending further proceedings. It mandates the filing of a counter affidavit by the concerned party within a specified timeframe and schedules the petition for admission or final disposal. The release of the goods is conditioned upon furnishing an indemnity bond and security, excluding cash or bank guarantee, in compliance with the determined tax and penalty under Section 129(3) of the Act, subject to the penalty order.This comprehensive analysis of the judgment delves into the legal intricacies surrounding the appealability of seizure orders, the necessity of a fair hearing in such matters, and the procedural directives for the release of goods pending further legal proceedings.