Case Summary: M/S Hanuman
Trading Co. Vs. State of Gujarat
R/Special
Civil Application No. 6129 of 2019
Court: High Court of Gujarat
Date: 19.02.2020
In a recent decision
by the High Court of Gujarat, the case of M/S Hanuman Trading Co. v. State of
Gujarat addresses crucial issues surrounding the detention and confiscation of
goods under the Goods and Services Tax (GST) Act. The case, heard by Honourable
Mr. Justice J.B. Pardiwala and Honourable Mr. Justice Bhargav D. Karia,
centered on allegations of unlawful detention and subsequent confiscation
proceedings initiated under Sections 129 and 130 of the GST Act.
Facts of the Case:
M/S Hanuman Trading
Co., represented by proprietor Sandip Kumar, filed a Writ Application under
Article 226 of the Constitution of India challenging the legality of actions
taken by the respondent authorities. The petitioner sought the quashing of an
order of detention passed under Section 129(1) of the GST Act concerning goods
and conveyance (Truck No. RJ-14-GE-1377) detained at Dabhoi on 13th March 2019.
Additionally, the petitioner sought to set aside the notice for confiscation of
goods and levy of penalties under Section 130 of the GST Act, alleging
violations of natural justice and statutory provisions.
Submissions by Petitioner:
· The petitioner contended that the actions of
detention and the issuance of confiscation notice were illegal and contrary to
the provisions of the GST Act.
· They argued that the respondent failed to
comply with procedural safeguards under Section 129, which mandates issuing a
notice and providing an opportunity for hearing before initiating confiscation
proceedings under Section 130.
· The petitioner relied on a previous ruling by
a coordinate bench highlighting procedural lapses in similar cases.
Respondent's
Counter-argument:
· The State of Gujarat, represented by Assistant
Government Pleader Mr. Chintan Dave, defended the actions of the authorities as
per the provisions of the GST Act.
· They contended that the detention and subsequent
proceedings were justified based on alleged contraventions of GST rules and
regulations during transit.
Court's Findings and
Judgment:
The High Court of
Gujarat, taking cognizance of previous rulings and the procedural requirements
under Sections 129 and 130 of the GST Act, delivered a detailed oral order. The
court noted the petitioner's compliance with an interim order directing release
of goods upon payment of taxes but emphasized the need for the respondent to
justify the confiscation notice issued under Section 130.
Key Findings:
· The court referred to procedural deficiencies
noted in the notice for confiscation, which did not adequately specify grounds
and reasons as required by law.
· It underscored the importance of adherence to
procedural fairness and the principle of natural justice in such cases.
· The court directed the proceedings to continue
as per law, allowing the petitioner to contest the show cause notice under
Section 130 based on established precedents.
Summary:
The judgment in M/S
Hanuman Trading Co. v. State of Gujarat serves as a significant legal precedent
concerning GST enforcement and procedural safeguards. It reaffirms the
judiciary's role in ensuring adherence to statutory requirements and upholding
principles of fairness and natural justice in administrative actions under the
GST regime. The decision underscores the need for authorities to establish a
clear case before invoking punitive measures such as confiscation, thereby
balancing regulatory enforcement with safeguarding the rights of taxpayers.
This ruling is
expected to influence future cases involving GST enforcement actions, providing
clarity on procedural obligations and protections available to taxpayers under
Indian tax laws.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
