Seizure of Truck without notice infringes civil rights of the Transporter as it is Capital Assest: Allahabad High Court
Case Title: Akbar Ali Transport Services v. State of U.P. and Another
Case No: WRIT TAX No. – 1524 of 2023
Decided on: 9th January, 2024
CORAM: THE HON’BLE MR. JUSTICE MANJIVE SHUKLA AND HON’BLE MR. JUSTICE S.D. SINGH
Facts of the Case
The petitioner’s vehicle, engaged in transporting goods for M/s Royal India Enterprises, was seized, leading to proceedings under Section 129 of the UP GST Act 2017. A show cause notice (MOV-07) was served to the dealer, resulting in the issuance of MOV-9 (penalty order).
The petitioner’s counsel contended that the petitioner did not receive a show cause notice regarding the seizure of the truck. As a result, the penalty order against the petitioner was rendered ex-parte.
Issue
Whether the seizure of vehicle carrying goods without notice would amount to violation of civil rights of the petitioner?
Court’s analysis and decision
The Allahabad High Court has ruled that the confiscation of a vehicle involved in transporting goods impacts the civil rights of the transporter, considering the truck as a significant asset. The court emphasized that before imposing any penalty on the transporter, a fair opportunity for a hearing should be provided. While recognizing that the goods-carrying vehicle could be released by paying Rs. 1 Lakh under proviso-1 of Section 129 (6) of the UP Goods and Service Tax Act, 2017, the bench, consisting of Justice Saumitra Dayal Singh and Justice Manjive Shukla, asserted that the truck holds substantial value as a property and a capital asset crucial for the transporter’s income generation. The court expressed concern that the petitioner’s valuable civil rights were adversely affected without a proper hearing.
According to the court’s interpretation of the law, the petitioner is eligible for the release of the truck upon depositing Rs. 1 Lakh as specified in proviso-1 of Section 129 (6) of the Act. The court emphasized the petitioner’s right to a fair hearing to present their case and establish that there was no collusion between the transporter and the dealer.
In light of the circumstances, the court determined that the petitioner should be given an opportunity to provide an explanation and demonstrate that they were not involved in any collusion or illegal activities attributed to the dealer regarding the transported goods. Since the penalty order did not establish any collusion, the court instructed that it should be treated as a show cause notice for the petitioner to secure the release of the truck.
The court further directed that, upon the petitioner’s response, they should be granted an opportunity for a hearing. Importantly, the court clarified that releasing the truck would not affect the seizure of the goods or the penalty proceedings against the dealer, M/s Royal India Enterprises.
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Written by- Afshan Ahmad