India Logistics and Cargo Movers vs. State of Gujarat – 2019 (31) G.S.T.L. 3 (High Court – Gujarat)

Goods and conveyance confiscated without issuing the speaking order, shall not be sustained and amounts to violation of principles of natural justice.

Facts: In this case, the Petitioner is engaged in the business of transport, procured about 61 different customers. While, the goods were in transit, State Tax Officer (Respondent) intercepted the vehicle and found that the e-way bills of three parties were not generated. The statement of the driver in charge of the vehicle came to be recorded in Form GST MOV-1. 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 by issuing a notice in Form GST MOV -10 under Section 130 of the CGST Act, 2017. 

The Petitioner provided justification for not generating the above-mentioned e-way bills; however, there was no response from the Respondents. The Petitioner agreed to pay the tax and penalty as calculated on the basis of transaction value in the invoice as envisaged under Section 129 of the CGST Act/ GGST Act. However, the Respondent passed an order increasing the value of goods by 20% and confiscating the goods under Section 130 of the CGST Act.

Issue: Whether the penalty and confiscation order passed by the respondent is valid in law.

Held: The court has set aside the impugned order stating that the same is non-speaking order. Hence it would remand the matter to the authority to decide the same afresh by stating proper reasons. It is the responsibility of the department to give reasons in support of their action for confiscating the goods and conveyance. In the present matter the proper officer has confiscated the goods without issuing the speaking order. Therefore, the said order cannot be sustained. It amounted to violation of principles of natural justice.

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