The imposition of penalties without adherence to principles of natural justice renders administrative orders unsustainable.

JUDGMENT :

BHARGAV D. KARIA, J.

1 Heard learned advocate Mr.Uchit Sheth for the petitioner and learned advocate Mr.C.B.Gupta for respondent Nos. 3,4 & 5 and learned Assistant Government Pleader Ms.Shrunjal Shah for respondent No.2.

2 Having considered the issue arising in this petition in a narrow compass, with the consent of the learned advocates, the same is taken up for hearing.

3 Rule returnable forthwith. Learned advocates for the respondents, waives notice of service of rule for the respective respondents.

4 By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs:

“A. This Hon'ble Court may be pleased to strike down and declare Section 129 of the GST Acts as being manifestly arbitrary, disproportionate and violating Article 14 and 301 of the Constitution of India;

B. This Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside order dated 4.10.2018 (annexed at Annexure F) and order dated 2.8.2019 (annexed at Annexure I);

C. Without prejudice to the above and in the alternative it may please be held that Section 129 of the GST Acts only provides for mechanism for provisional release of goods and does not result in final adjudication of liability unde the GST Acts;

D. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the learned Respondents to refund the amount of tax and penalty collected and retained pursuant to the impugned orders under Section 129 of the GST Acts;”

5 At the outset,learned advocate Mr.Uchit Sheth submits that the petitioner, under instructions, does not press the relief in para A regarding the challenge to the vires of Sec.129 of the Central/ State Goods & Service Tax Act, 2017 (for short ‘the GST Act’).

6 The brief facts of the case are as under:

6.1 The petitioners are engaged in the business of manufacturing and sale of tractors, having their Head Office situated in the State of TamilNadu at Chennai.

6.2 In the course of business, the petitioners were supplying two tractors from its depot in Gujarat to a customer located in Bhavnagar after generating tax invoices in its online SAP software and also generated the e-way bill with part A only.

6.3 It is the case of the petitioners that the petitioners had directed their transporter to generate Part B of the e-way bill, but the transporter faced technical glitches in the system and hence could not generate the same.

6.4 It is not in dispute that the goods started movement on 03.10.2018 at night along with tax invoices and e-way bill having part A only. The respondent No.5 intercepted the conveyance with the goods in early hours of 04.10.2018 for physical verification on the ground that the e-way bill was not having part B comprising the details of the conveyance in which the goods are being transported.

6.5 The respondent No.5 immediately carried out the requisite process as prescribed in Rule 138 of the Central / State Goods & Service Tax Act,2017 (for short ‘the GST Rules’), by issuing Form GST MOV-1, GST MOV-2, GST MOV-4 for physical verification, and thereafter, issued the detention order in Form GST MOV-6 on the very same ground i.e. on 04.10.2018.

6.6 The respondent No.5 also issued the Form GST MOV-7 in form of a show-cause notice calling upon the petitioner to immediately attend the proceedings on 04.10.2018, and thereafter, passed an ex-parte order on the very same day on 04.10.2018 in Form GST MOV-09 demanding payment of tax and penalty under Sec.129(1) of the GST Act.

6.7 It is the case of the petitioners that as the petitioners had urgency in getting the goods released, the tax and penalty as demanded in Form GST MOV-09 was deposited on 06.10.2018 and on payment of such demand, the goods were released by the respondent No.5 in Form GST MOV-05.

6.8 The petitioners, thereafter, preferred an appeal bef