Vehicle seizure tax penalty orders quashed for violating mandatory notice requirements under Section 129(3) and 129(4)

HC quashed tax and penalty orders imposed on petitioner whose vehicle was seized due to expired e-way bill. Vehicle reached destination one day late due to mechanical defect, causing e-way bill expiry. Court held that respondent authorities violated statutory provisions by imposing penalty without issuing mandatory notice under Section 129(3) and without providing opportunity of hearing as required under Section 129(4). Despite court's specific directions, authorities proceeded with assessment without compliance. Orders dated 01.04.2022 and 02.04.2022 imposing tax and penalty were set aside for procedural violations.

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Issues:
The issues involved in the judgment are the detention and seizure of goods due to expired e-way bill, imposition of tax and penalty without opportunity of being heard, non-compliance with court orders, and quashing of impugned orders.

Detention and Seizure of Goods:
The petitioner, a civil contractor, purchased a concrete machine for a government project but faced detention of goods due to an expired e-way bill. Despite the mechanical defect causing the delay, the vehicle was detained, and the seller approached the court for release, which was granted on providing an undertaking. However, the respondent imposed tax and penalty without giving an opportunity to be heard, violating Section 129 of the GST Act.

Imposition of Tax and Penalty:
The respondent issued a notice under Section 129(3) of the CGST and SGST Act, imposing tax and penalty on the driver of the vehicle without considering the seller's request to file a reply. The court found that the imposition of tax and penalty without providing an opportunity for hearing was against the provisions of the Act, leading to the quashing of the impugned order dated 01.04.2022.

Non-Compliance with Court Orders:
Despite specific directions from the court to release the goods and vehicle based on an undertaking, the respondent failed to comply and instead imposed tax and penalty arbitrarily. The court noted the non-compliance with its order and the lack of issuance of a show-cause notice to the petitioner post-judgment, indicating a violation of the principles of natural justice.

Quashing of Impugned Orders:
The judgment quashed the impugned order dated 01.04.2022 passed by the respondent imposing tax and penalty and the demand notice issued on 02.04.2022. The court allowed the writ petition, emphasizing that the respondents must initiate actions in accordance with the law and highlighting the importance of following court orders and principles of natural justice.

Conclusion:
The judgment addressed the issues of detention and seizure of goods, imposition of tax and penalty without a hearing, non-compliance with court orders, and ultimately quashed the impugned orders while emphasizing the importance of adherence to legal procedures and principles of justice.

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