2023 (4) TMI 307 - HC - GST

Procedural Violations in GST Detention Invalidate Order, Mandate Fresh Hearing with Comprehensive Evidence Submission

HC found merit in petitioner's claim of procedural violation under GST Act. The court set aside detention orders due to lack of proper hearing ... Detention of goods under Section 129(3) SGST Act - principles of natural justice - opportunity of hearing - application of CGST/SGST versus IGST - de novo adjudicationOpportunity of hearing - principles of natural justice - detention of goods under Section 129(3) SGST Act - Impugned detention orders were passed without granting hearing on the revised notice dated 24.03.2023 and thereby breached principles of natural justice. - HELD THAT: - The court examined the record and found that the personal hearing recorded on 24.03.2023 related only to an earlier notice dated 18.03.2023 under the IGST Act. A subsequent revised notice dated 24.03.2023, invoking CGST/SGST provisions, was issued on the same date but the petitioner was not afforded any opportunity to respond to that revised notice and was not heard before passing the impugned detention orders. On this basis the court concluded that the proceedings were concluded contrary to the requirements of natural justice and set aside the impugned orders. [Paras 3, 4, 5, 6]Impugned orders Nos.889/2022-23/ADJ, 892/2022-23/ADJ and 890/2022-23/ADJ dated 24.03.2023 are set aside for want of hearing.Hearing on revised notice - de novo adjudication - Whether the matter should be remanded for fresh hearing and adjudication in respect of the notice dated 24.03.2023 invoking CGST/SGST provisions. - HELD THAT: - The court directed that the petitioner be permitted to appear before the first respondent on 05.04.2023 at 10:30 a.m. with a reply to the revised notice dated 24.03.2023, without requiring any further notice. The respondents were directed to hear the petitioner, consider the reply, and pass fresh orders de novo within one week from 05.04.2023. The order therefore remands the matter for fresh consideration on merits limited to the procedure and adjudication under the CGST/SGST provisions as set out in the revised notice. [Paras 6, 7]Petitioner permitted to appear on 05.04.2023; respondents to hear and pass de novo orders within one week from that date.Final Conclusion: Writ petitions allowed: impugned detention orders set aside for breach of natural justice; matter remanded for fresh hearing on the revised notice dated 24.03.2023 with directions to hear the petitioner on 05.04.2023 and to pass de novo orders within one week thereafter. Issues Involved:The petitioner challenges an order of Goods detention under Section 129(3) of the State Goods and Services Act, 2017, alleging lack of hearing prior to the impugned order.Issue 1 - Lack of Opportunity for Hearing:The petitioner contended that they were not offered any hearing before the impugned order was passed. However, upon examination of records, it was found that a personal hearing did take place on 24.03.2023, but it was in relation to a notice issued on 18.03.2023 under the IGST Act, not the subsequent notice dated 24.03.2023. The petitioner had responded to the IGST Act notice by stating its inapplicability to the transaction. Subsequently, a revised notice was issued under the CGST/SGST Act without granting the petitioner an opportunity to respond or be heard. The court found merit in the allegation that the proceedings were concluded in violation of the principles of natural justice.Decision:The High Court set aside the impugned orders dated 24.03.2023 (bearing Nos. 889/2022-23/ADJ, 892/2022-23/ADJ, and 890/2022-23/ADJ) due to the lack of opportunity for the petitioner to respond to the subsequent notice. The petitioner was granted permission to appear before the 1st respondent on 05.04.2023 at 10:30 a.m. without further notice, along with a reply to the notice dated 24.03.2023. After hearing the petitioner and considering the reply, if any, new orders were to be passed within a week from 05.04.2023. The Writ Petitions were allowed, and no costs were imposed. Connected Miscellaneous Petitions were closed.