Order Quashed for Violating Natural Justice, New Show Cause Notice Required

The court quashed the order dated 15.09.2021 for violating natural justice principles, directing a proper show cause notice under Section 130 of the CGST Act and a fresh hearing. The conveyance and goods were to be released within seven days, pending the final outcome.

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Issues Involved:
1. Violation of Principles of Natural Justice
2. Issuance of Show Cause Notice
3. Opportunity of Hearing
4. Imposition of Redemption Fine
5. Alternative Efficacious Remedy

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The petitioner challenged the order in Form GST MOV-11 dated 15.09.2021 on the grounds of violation of natural justice principles and Section 130 of the CGST Act. The petitioner argued that the order was passed without serving a copy or granting an opportunity of hearing. The court emphasized that the principles of natural justice were violated as no show cause notice was issued to the petitioner, and no opportunity of hearing was provided. The court referenced previous judgments (Sitaram Roadways and Synergy Fertichem Pvt. Ltd.) to highlight the necessity of adhering to natural justice principles, such as issuing a show cause notice and providing a hearing before passing any adverse order.

2. Issuance of Show Cause Notice:
The court noted that the show cause notice under Section 129 and 130 of the CGST Act was issued only to the truck driver and not to the petitioner or the truck owner. The respondent failed to demonstrate any representation by the owner of the goods at the time of passing the order under MOV 11. The court found that the absence of a show cause notice to the petitioner constituted a gross violation of natural justice.

3. Opportunity of Hearing:
The petitioner argued that they were not given an opportunity to be heard before the order was passed. The court observed that the respondent did not provide any evidence of a hearing opportunity being given to the petitioner. The court reiterated the importance of providing a hearing opportunity, as emphasized in the cited judgments, and found that the respondent's actions were in clear violation of this requirement.

4. Imposition of Redemption Fine:
The petitioner had already paid the tax and penalty amounting to Rs. 2,28,038/-, but the goods were not released due to the imposition of a redemption fine equivalent to the value of the goods (Rs. 22,80,362/-). The court referred to the Synergy Fertichem Pvt. Ltd. judgment, which highlighted that the imposition of a redemption fine should reflect the seriousness of the contravention and should not be the maximum fine in every case. The court found that the respondent's imposition of the maximum fine without considering the specifics of the case was inappropriate.

5. Alternative Efficacious Remedy:
The respondent argued that the petitioner had an alternative efficacious remedy available under Section 107 of the CGST Act. However, the court noted that exceptions to this rule exist, particularly in cases of natural justice violations. Given the clear breach of natural justice principles, the court chose to entertain the writ petition despite the availability of an alternative remedy.

Conclusion:
The court quashed and set aside the impugned order dated 15.09.2021 due to the violation of natural justice principles. The matter was restored to the file of respondent No.3 to issue a proper show cause notice under Section 130 of the CGST Act and to decide the matter afresh, providing a reasonable opportunity of hearing to the petitioner. The court directed the release of the conveyance and goods within seven days from the receipt of the order, subject to the final outcome of the proceedings under Section 130 of the CGST Act. The petition was disposed of accordingly.

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