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J. B. PARDIWALA, R. MAHADEVAN
ASP Traders – Appellant
Versus
State of Uttar Pradesh – Respondent
| Table of Content |
|---|
| 1. legal obligation to issue reasoned order post payment. (Para 3 , 4 , 7) |
| 2. concept of concluding proceedings outlined under the statute. (Para 8 , 9) |
| 3. discussion of the legal provisions on gst and appeal rights. (Para 10 , 11 , 12) |
| 4. clarification on legal obligations post gst payment. (Para 14 , 15 , 18) |
| 5. procedural fairness and appellate rights must be observed. (Para 17) |
| 6. court's directive to issue a reasoned order. (Para 21 , 22) |
JUDGMENT :
Leave granted.
3. The relevant facts giving rise to the present appeal are as follows:
3.2. During transit, the goods were transhipped and loaded onto another vehicle bearing Registration No. HR-38-U-0152 for onward journey to Delhi. However, only 248 bags were loaded onto the new vehicle, with 7 bags missing from the original consignment.
3.4. Subsequently, a notice dated 21.01.2022 under section 129(3) of the Central Goods and Services Tax Act, 20172[For short, “the CGST Act, 2017”], was issued in Form GST MOV-07 highlighting the discrepancy of 7 missing bags and the resulting shortfall in quantity from 18220 kg to 17670 kg. It was further alleged that the consignee, M/s. Diamond Trading Company, was prima facie non-existen
A final, reasoned order under Section 129(3) must be issued despite payment to protect the taxpayer's right of appeal, ensuring adherence to principles of natural justice.
Point of law: The extraordinary powers under Article 226 of the Constitution, directing for release of the vehicles or goods, during the pendency of the confiscation, can only be sparingly exercised ....
The failure to provide valid notice and opportunity to be heard constitutes a violation of natural justice, necessitating quashing of ex parte orders under the GST Act.
The court established that confiscation under Section 130 requires prior action under Section 129, and adherence to natural justice is essential in such proceedings.
The expiration of an e-way bill during transit, without any intent to evade tax, does not justify severe penalties under the CGST Act; penalties must be proportionate to the offense committed.
Natural justice requirements necessitate notice to affected parties; however, notice to the driver suffices, supporting reliance on alternative statutory remedies for contesting orders.
Minor errors in e-way bills do not justify detention under Section 129 of the CGST Act if the goods are otherwise properly documented.
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