IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF NOVEMBER, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.50631/2019 (T – RES) BETWEEN:
M/S. BRIGHT ROAD LOGISTICS REPRESENTED BY PROPRIETOR MR. NEGRU, AGED ABOUT 33 YEARS HAVING ITS REGISTERED OFFICE AT AVINASHI ROAD TIRPUR, TAMIL NADU-641602 REPRESENTED BY ITS PROPRIETOR MR. R. NEHRU ... PETITIONER [BY MS. VEENA J. KAMATH, ADV. FOR M/S. KAMATH & KAMATH, ADVS.,] AND:
COMMERCIAL TAX OFFICER (ENFORCEMENT-09) SOUTH ZONE 3RD FLOOR, VTK-2, B BLOCK, VIVEKANAGAR KORMANGALA BENGALURU – 560047.
…RESPONDENT [BY SRI VIKRAM HUILGOL, ADV.,] THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE/QUASH THE IMPUGNED ORDER OF DETENTION U/S 129(1)(b) OF KGST/CGST AND IGST ACT DATED 22.10.2019 IN FORM GST MOV.09 AS PER ANNEXURE-A AND REMAND THE MATTER TO THE RESPONDENT TO PROVIDE A FAIR, UNBIASED AND SUFFICIENT OPPORTUNITY OF BEING HEARD, BY CONSIDERING THE PETITIONERS OBJECTIONS AS WELL AS FURNISH TO THE PETITIONER WITH ALL THE INCRIMINATING MATERIALS AGAINST THE INTEREST OF THE PETITIONER AND THEREAFTER PASS A REASONED SPEAKING ORDER IN ACCORDANE WITH LAW.
THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Learned counsel Sri. Vikram Huilgol accepts notice for the respondent.
The petitioner has challenged the order dated 22.10.2019 passed under Section 129(1)(b) of the Karnataka Goods and Services Tax Act/Central Goods and Services Tax Act, 2017.
2. The petitioner is a transporter, registered under the provisions of the Goods and Services Tax Act, 2017 (‘GST Act’ for short) and is engaged in the business of transportation of goods across the different parts of the country. It is submitted that the petitioner was approached by M/s. Bhima Trading Company incorporated at #4/2018, Marmangalathupatty Steel Plant Main Road Salem, Tamil Nadu – 636030 for transporting certain scrap goods to the consignee, M/s. Rajendra Traders incorporated at #105, Nangil Poona village, New Delhi – 110036. Thus, the role of the petitioner was only a transporter to transport goods from Salem to New Delhi. Accordingly, the petitioner used its conveyance to transport and during the transit from Salem to New Delhi, the respondent intercepted the said conveyance bearing No.RJ14GH6541 on 02.10.2019 at 12.15 a.m. at Madavara, Tumkur Road, Bengaluru for verifying the genuiness of the transaction and the veracity of the accompanied documents. The driver of the conveyance has furnished the lorry receipts, E-way Bill and Tax Invoice. The respondent after examining the same arrived at a conclusion that the said goods are not originated from Tamil Nadu. The conveyance along with the goods was retained and an order was passed under Section 129(1) of the GST Act in Form GST MOV-09. The representation was submitted by the petitioner to release the goods along with the conveyance. However, the show-cause notice dated 11.10.2019 was issued to the petitioner under Section 129(1)(b) of the GST Act on the premise that the consignor is non-existent.
3. It is the contention of the petitioner that provisional objections were submitted to the said show- cause notice further seeking for an opportunity of hearing. However, the respondent has proceeded to pass the order impugned under Section 129(1)(b) of the Act holding that the petitioner has no locus to dispute or raise issue either on behalf of the consignor/consignee or the person in charge of the conveyance. Hence, the present writ petition.
4. Learned counsel for the petitioner submitted that the respondent having issued the show-cause notice to the petitioner, in arriving at a decision that the petitioner has no locus standi to either file the objections or raise dispute on behalf of the consignor/consignee or person in charge of the conveyance is wholly illegal. The order impugned suffers from the vice of arbitrariness and is hit by the principles of natural justice.
5. Learned counsel for the revenue supporting the order impugned submitted that the petitioner is neither consignor nor the consignee for release of the goods. Proceedings under Section 130(2)(iii) and the proviso thereof is applicable to the release of the conveyance. It is not mandatory for the petitioner to make the payment towards penalty determined under Section 129(1)(b) of the Act.
6. Having heard the learned counsel for the respective parties, this Court is of the considered opinion that the order impugned cannot be held to be justifiable for the reason that the respondent having issued show-cause notice calling upon the petitioner to file objections, cannot turn around and take a decision that the petitioner has no locus standi either to file objections or to putforth dispute on behalf of the consignor/consignee or the owner of the conveyance. Indeed, the order impugned is against the principles of natural justice which is the fundamental parameter required to be observed by the quasi- judicial authority.
7. Hence, the petitioner is at liberty to file any additional objections to the show-cause notice dated 11.10.2019 issued under Section 129(1)(b) of the Act within a period of ten days from the date of receipt of certified copy of the order. The respondent shall consider the preliminary objections as well as final/additional objections to be filed by the petitioner, in accordance with law and an appropriate order shall be passed in an expedite manner.
8. Accordingly, the impugned order at Annexure – A dated 22.10.2019 is quashed and the proceedings are restored to the file of the respondent.
The respondent shall provide a reasonable opportunity of hearing to the petitioner and after considering the objections filed/to be filed by the petitioner shall decide the matter in accordance with law in an expedite manner.
All the rights and contentions of the parties are left open.
The writ petition stands disposed of in terms of the above.
Sd/- JUDGE PMR