Court Quashes Penalty Order for Violating Natural Justice Principles

The court quashed the penalty order under Section 129(3) of the Central Goods and Services Act, 2017 due to violations of natural justice principles. It found that the order was based on undisclosed documents and circumstances, denying the petitioner a personal hearing and the opportunity to cross-examine witnesses. The court emphasized the importance of providing reasonable opportunities, setting aside the order and remitting the matter for fresh disposal. It directed the respondent to provide documents, allow cross-examination, and conduct proceedings online due to the pandemic. The court instructed the respondent to conclude proceedings within one month, keeping all contentions open for further consideration.

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Issues:
Challenge to penalty order under Section 129(3) of the Central Goods and Services Act, 2017 on grounds of violation of principles of natural justice.

Analysis:
The petitioner sought the quashing of the penalty order under Section 129(3) of the Act, alleging violations of natural justice principles. The petitioner argued that the impugned order was based on documents not previously brought to their notice, without affording a personal hearing or providing a reasonable opportunity to respond. The respondent, on the other hand, contended that the petition lacked merit and highlighted the availability of appeal as a remedy. Upon review, the court observed that the impugned order relied on undisclosed documents and circumstances, without granting the petitioner a personal hearing or the chance to cross-examine witnesses. The court found these actions to be in violation of natural justice principles, leading to the quashing of the order.

The court emphasized the importance of providing sufficient and reasonable opportunities to the petitioner, noting that the lack of such opportunities rendered the impugned order invalid. Consequently, the court set aside the order and remitted the matter back to the Assistant Commissioner for fresh disposal in accordance with the law. The court directed the respondent to provide all relied-upon documents to the petitioner, allow cross-examination of witnesses, and permit the submission of additional documents. Additionally, in light of the Covid-19 pandemic, the court ordered that proceedings could be conducted online via video conferencing at the petitioner's cost. To expedite the process due to perishable goods involved, the court directed the respondent to conclude the proceedings within one month. The court kept all contentions open for further consideration.

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