Gujarat HC quashes Order of Detention of Goods citing the Ground that it is a Non-Speaking Order [Read Judgment]

Unwarranted Detention - Transport Receipt - Detention - Taxscan

The Gujarat High Court has quashed an order of detention of goods citing the Ground that it is a Non-Speaking Order.

The petitioner has challenged the notice dated 16.5.2019 issued in Form GST MOV-10 as well as the detention/confiscation order dated 16.5.2019/28.5.2019 issued by the Department in Form GST MOV-11 and seeks a direction to the respondent authorities to forthwith release truck along with the goods contained therein.

The petitioner, a sole proprietorship firm, which is inter alia engaged in the business of transport, procured about 61 different customers. On 16.5.2019 at 13:50 hours while the goods were in transit in vehicle No.GJ-27-X-3752, the third respondent – State Tax Officer, Mobile Squad, Enforcement, Division-2, Ahmedabad intercepted the vehicle at Narol Char Rasta and found that the e-way bills of three parties, namely, Anjani Synthetics Limited dated 30.4.2019, Neelam Fabrics dated 15.5.2019 and Bhansali Cotfab dated 16.5.2019 were not generated. The statement of the driver in charge of the vehicle came to be recorded in Form GST MOV-1. It appears that the goods in respect of 58 customers wherein there were valid e-way bills came to be released; however, the vehicle with the goods in respect of the above three parties came to be detained on the spot on 16.5.2019 by issuing a notice in Form GST MOV -10 under section 130 of the Central Goods and Services Tax Act, 2017 as well as the Gujarat Goods and Services Tax Act, 2017.

The division bench comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen observed that, the department without applying his mind to the facts of the case appears to have mechanically passed the impugned order without assigning any reasons worth the name for confiscating the goods and conveyance.

The Court also criticised the department that, the least that is expected of the authorities discharging duties under these Acts is that they should properly apply their minds to the facts of the case before taking drastic action under the provisions of section 130 of the CGST Act/ GGST Act. Passing orders in a perfunctory manner has been done in the present case without considering the explanations tendered by the affected parties and without assigning reasons, therefore, amounts to an abdication of duties on the part of the concerned officer and causes immense prejudice to the parties.

The Court also said that, “it was incumbent upon the third respondent to give reasons in support of his conclusion that the goods in question and the conveyance are required to be confiscated. However, the impugned order is totally bereft of any reasons, in the absence of which the order stands vitiated due to nonapplication of mind on the part of the maker of the order. The impugned order dated 28.5.2019, therefore, cannot be sustained. Since the court is inclined to set aside the impugned order on the ground that it is a non-speaking order, ordinarily, it would remand the matter to the authority to decide the same afresh by assigning proper reasons. However, in the facts of the present case, the third respondent has filed an affidavit-in-reply which has been extensively referred to hereinabove. As discussed earlier, on the grounds set forth in the affidavit-in-reply, the goods in question could not have been confiscated. Under the circumstances, no useful purpose would be served in remanding the matter to the third respondent”.

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