The Hon’ble Uttarakhand High Court in the case of M/s Gajanand Granite v. Office of State Tax Officer, Dehradun [Writ Petition (M/B) No. 358 of 2025, dated June 12, 2025] held that the confiscation proceedings initiated and concluded on the same day without affording an opportunity of being heard to the petitioner and merely relying on the statement of the driver of the vehicle are in violation of the mandate prescribed in Section 130 (4) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
Facts:
Gajanand Granite (“the Petitioner”) is a consignor whose goods were being transported by a lorry when the same was intercepted by the GST authorities. The State Tax Officer (“the Respondent”) intercepted the lorry carrying the goods, inspected the documents, issued a show cause notice, and proceeded to pass an order of confiscation of goods along with imposition of fine and penalty, all on the same day. The reply to the said notice was given by the driver of the vehicle.
The Petitioner contended that the entire sequence of actions of interception, issuance of notice, reply (by the driver), and passing of the confiscation order, was concluded on the same day without affording the Petitioner an opportunity of hearing. It was also contended that the driver was not competent to represent the Petitioner and that the action was in blatant violation of Section 130(4) of the CGST Act.
The Respondent contended that the sequence of events, including the issuance of show cause notice and confiscation on the same day, had indeed occurred, and no further justification was advanced.
Aggrieved by the arbitrary and unlawful confiscation proceedings along with imposition of fine & penalty, the Petitioner approached the Hon’ble High Court by way of a writ petition under Article 226 of the Constitution of India.
Issue:
Whether confiscation orders and imposition of fine & penalty can be done by mere reliance on the statement of the driver of the vehicle without giving an opportunity of being heard?
Held:
The Hon’ble Uttarakhand High Court in Writ Petition (M/B) No. 358 of 2025 held as under:
- Observed that, the entire sequence of events took place on the same day, without giving the Petitioner an opportunity of being heard.
- Noted that, the reply relied upon was furnished by the driver of the vehicle, who was unconnected to the goods and had no authority to respond to the show cause notice.
- Held that, such action was not only arbitrary but also in violation of Section 130(4) of the CGST Act, which mandates that no order of confiscation or penalty shall be issued without affording the person an opportunity of being heard.
- Further set aside the confiscation order and imposition of fine and penalty and directed that the matter be remitted back to the Deputy Commissioner, Commercial Tax, Dehradun, to recommence proceedings from the stage of issuance of show cause notice, in accordance with law.
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