Natural justice under the CGST Act requires a hearing before confiscation or penalty; same-day order was set aside.

An order of confiscation, fine and penalty under the CGST Act cannot be sustained if passed on the same day as interception without affording the person concerned an effective opportunity of hearing. Section 130(4) requires that no confiscation or penalty order be issued without such hearing, and the procedure followed here breached that statutory safeguard and was arbitrary. The confiscation and penalty order was therefore set aside, and the matter was remitted to the competent authority to restart proceedings from the stage of issuance of show-cause notice.

---

---

Issues: Whether an order of confiscation, fine and penalty under the CGST Act could be sustained when passed on the same day as interception and without affording the person concerned an opportunity of being heard.

Analysis: The sequence of events showed that interception, issuance of notice, reply, and the impugned order were completed on the same day. The statutory mandate under sub-section (4) of Section 130 of the Central Goods and Services Tax Act, 2017 prohibits issuance of an order for confiscation or penalty without giving the person an opportunity of being heard. Since the procedure adopted did not provide such opportunity, the action was contrary to the statutory safeguard and was also arbitrary in nature.

Conclusion: The confiscation and penalty order was set aside, and the matter was remitted to the competent authority to restart the proceedings from the stage of issuance of show-cause notice.

---