GST Detention Order Quashed Due to Violation of Natural Justice

By
Kirti Gupta
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Case Title: Sawarlal Agarwal v. State of Uttar Pradesh & Others
Court: High Court of Judicature at Allahabad (Chief Justice’s Court)
Petition No.: Writ Tax No. 238 of 2025
Category of Dispute: Detention and Seizure – Violation of Natural Justice
Date of Judgment: 24 January 2025
Relevant Section: Section 129(3), UPGST Act, 2017
Coram: Hon’ble Chief Justice Arun Bhansali, Hon’ble Justice Vikas Budhwar

Facts of the Case

(Para 1–2)

  • Goods being transported by the petitioner were detained under Section 129 of the UPGST Act.

  • A notice dated 05.12.2024 in Form GST MOV-7 was issued in the name of the vehicle driver.

  • The petitioner submitted a representation dated 11.12.2024, claiming ownership of the goods.

  • Despite this, an order dated 17.12.2024 under Section 129(3) was passed in the name of the driver.

  • Later, a fresh notice dated 19.12.2024 was issued to the petitioner with a demand of ₹8,03,386. The petitioner paid this under protest.

  • On the same day, i.e., 19.12.2024, an impugned rectified order was passed again in the name of the driver, referencing the petitioner.

Questions in Consideration

(Para 3–4)

  • Whether the rectified order dated 19.12.2024 passed under Section 129(3) is sustainable when it was issued and finalized on the same day without awaiting petitioner’s reply?

  • Whether passing the impugned order violated the principles of natural justice?

Observations of the Court

(Para 5–7)

  • The Court noted that the show cause notice (Annexure-10) was issued on 19.12.2024, allowing seven days to respond.

  • Despite this, the rectified order (Annexure-1) was passed the same day without waiting for petitioner’s reply.

  • It was held that the authorities were obligated to wait for the petitioner’s response before taking any action.

  • The failure to do so amounted to gross violation of the principles of natural justice.

Judgment of the Court

(Para 8–9)

  • The writ petition was allowed.

  • The impugned order dated 19.12.2024 was quashed.

  • The matter was remanded to the Assistant Commissioner, State Tax, Agra.

  • The petitioner was permitted to file a response to the show cause notice dated 19.12.2024.

  • The authority was directed to pass a fresh order after providing the petitioner an opportunity of hearing.

Between Fine Lines

  • GST detention order was passed without giving time for the petitioner’s reply.

  • Even though a fresh notice was issued, the same day order undermined fair procedure.

  • The High Court emphasized adherence to natural justice.

  • Matter remanded for proper adjudication after hearing.

  • Authorities cannot shortcut statutory timelines, even in rectification scenarios.

Summary of Referred Cases

(No prior case citations or references were discussed in the judgment.)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”

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