Seizure Order Under Section 129(1) Quashed for Lack of Hearing and Natural Justice Violation

The HC quashed the seizure order issued under Section 129(1) of the U.P. GST Act, 2017, holding that the petitioner was not afforded an opportunity of hearing, violating principles of natural justice. Although the goods were seized for transportation without a valid E-way bill and a GSTIN mismatch, the court found the seizure unjustified as the tax invoice and E-way bill were available before the seizure. The order lacked details of the dealer and mobile number, and the petitioner was granted time to respond after detention. The writ petition was allowed, and the seizure order was set aside in favor of the petitioner.

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Issues:
Challenge to seizure order and show cause notice under Section 129(1) and 129(3) of the U.P. G.S.T. Act, 2017.

Analysis:
The petitioner contested the seizure order dated 27.3.2018 and the show cause notice issued under Section 129(3) of the U.P. G.S.T. Act, 2017. The petitioner, a registered dealer in Iron and Steel, sold goods to another registered dealer. The goods were being transported when intercepted by the seizing authority, alleging discrepancies in the tax invoice and absence of an E-way bill. The petitioner argued that no opportunity of being heard was given before the seizure. The petitioner clarified that technical issues delayed E-way bill generation, rectified before the seizure. The petitioner contended that the tax was charged correctly, and clerical errors in the invoice were promptly corrected in the E-way bill.

The State's counsel argued against mentioning a different dealer's GSTIN in the invoice, despite its correctness in the E-way bill. The State emphasized the absence of the E-way bill during the vehicle inspection. The Court reviewed the facts and found no dispute on goods' quality, taxes charged, or the parties' registration status. The E-way bill was issued before the seizure, and the transaction details were clear. The Court dismissed the State's concerns about the unknown consignee, as the invoice details were available for verification. The seizing authority's failure to contact the consignee or verify the mentioned GSTIN details raised doubts about the seizure's validity.

Ultimately, the Court ruled in favor of the petitioner, deeming the seizure order and the show cause notice unjustified. The Court quashed both orders and directed the immediate release of the goods to the petitioner for delivery to the consignee. The judgment highlighted the importance of proper verification and adherence to legal procedures before seizing goods under the GST Act, ensuring fair treatment for registered dealers in transactions.

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