The Hon’ble High Court of Allahabad vide its order dated 20th April 2022 in the matter of Premium Traders Vs. State of U.P. and 2 others in Writ Tax No. – 582 of 2022, held that the order passed under Section 129 for detention of goods considering the invoice as bogus and without affording an opportunity of hearing to the assessee is erroneous in law.
The Petitioner preferred the Writ Petition before the Hon’ble High Court challenging the detention order dated 14.03.2022 under Section 129 issued in FORM GST MOV 06 by the respondents.
- The Petitioner (a registered dealer) is a trader of iron and steel and sold 10090 Kg TMT Bar valued at Rs. 4,16,717/- to M/s. Umar Enterprises, Ghaziabad (a registered dealer), through invoice No.747, dated 04.03.2022.
- The aforesaid goods were not accompanied with E-Way Bill, so were intercepted by the respondents issuing FORM GST MOV 02 dated 04.03.2022.
- Thereafter, the goods were detained under section with the issuance of order in FORM GST MOV 06 on three grounds ‘(i) goods were not accompanied with E-Way Bill, (ii) under valuation and (iii) invoice is bogus as GSTIN number is not mentioned’.
- Further through the order of detention, which was issued in the name of driver, it was directed to provide the details of purchases, sales and copy of periodical return.
- That consequently an undated notice under Section 129(3) was issued without mention of date of personal hearing and date of submitting reply, however petitioner submitted the reply for the same on 16.03.2022.
Petitioners Submissions: –
- It was submitted on the behalf of the petitioner that the order under Section 129 (3)(1) (B) was passed without considering the factual aspects of the case, and observing that no reply was submitted.
- That as the GSTIN number is not mentioned on the invoice, the respondents treated the goods to be not belonging to the respondents, despite the fact that the petitioner very categorically mentioned in the reply that the GSTIN number was not printed clearly due to less ink in cartridge. Moreover, the clear copy of the invoice was shown to the respondents when the goods were intercepted.
On the other hand, the findings of the impugned order were reiterated on the behalf of respondents.
- The Hon’ble Court after considering the submissions from the both sides and facts of the case observed that it is an admitted fact that the said goods were accompanied with the invoice issued by the Petitioner.
- Therefore, it was held that the respondents have committed an obvious error of law by not providing an opportunity of hearing to the petitioner despite persuasion made by the Petitioner.
The Hon’ble Court with the above findings and considering the impugned order dated 14.03.2022 under Section 129, against the principles of natural justice, quashed the same with the directions to the respondents to pass a fresh order considering the reply dated 16.03.2022 filed by the petitioner, and after providing a reasonable opportunity of hearing.