A division bench of the Jharkhand High Court has held that the goods or conveyance shall not be detained or seized without serving an order of detention or seizure on the person transporting the goods on the allegation of making transit in contravention of the provisions of the GST Act, 2017 or connected Rules.
A bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan was considering a petition by M/s. AMI Enterprises Pvt. Ltd, wherein the department seized the goods on ground of alleged violation of Section 129 of Central Goods and Services Tax Act, 2017 read with Rule 68 thereof as E-Way bill had expired at 11.59 p.m. on 17th September, 2021, the vehicle bearing no. JH05 AF 0361 was intercepted at 08:20 a.m. on 18th September, 2021.
Before the High Court, the petitioner contended that the entire proceedings were held ex parte and no proper opportunity of furnishing reply or hearing was accorded to the petitioner or his driver. There was no intention to evade tax and the vehicle was seized in teeth of Section 129(1) of CGST Act.
The division bench, after hearing arguments from both sides, held that “a bare perusal of the provisions of Section 129 shows that no goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods on the allegation of making transit in contravention of the provisions of the Act or Rule made thereunder. Sub-section (3) indicates that the proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1). Sub-section (6) provides that where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty.”
“Apparently, the proceedings have been initiated on the same date and concluded also on the same date. Though, learned counsel for the respondent has stated that the proceedings were expedited at the instance of the taxpayer on the same date, but there is nothing to substantiate such contention. The impugned adjudication order and the appellate order therefore both suffer from procedural infirmities and lack of proper opportunity to the petitioner or the person transporting to defend himself. As such, the impugned order dated 20th September, 2021 issued in Form GST MOV-09 and the appellate order dated 17th February, 2022 are set aside. However, the respondents are at liberty to take a fresh decision after due opportunity to the petitioner as provided under the Act,” the Court said.
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