Case Law Details
Jitendra Kumar Vs State of U.P. and Another (Allahabad High Court)
Allahabad High Court Quashes Detention Order and Show-Cause Notice: Goods Must Be Detained on Specific and Valid Grounds
In a recent judgment, the Allahabad High Court addressed an application under Article 226 of the Constitution of India filed by Jitendra Kumar against the State of U.P. and Another. The petitioner challenged the detention order dated 17.11.2023 and the subsequent show-cause notice dated 23.11.2023, asserting that the goods were unlawfully detained during transit from Patna to Aligarh. The court’s analysis centered on the shifting grounds provided by the Revenue Department and the principles of natural justice.
Detention Grounds: The petitioner’s goods were detained during transit, with the initial ground stated by the Revenue Department being the lack of valid accompanying documents.
Shift in Grounds: The show-cause notice, however, introduced a different ground. It claimed that in the GSTR 2A form, four out of other suppliers, as shown in the GSTR 2A, had their registrations suspended or cancelled.
Judicial Precedents Cited:
- The petitioner’s counsel relied on the Gujarat High Court’s judgment in F.S. Enterprise vs. State of Gujarat and a co-ordinate Bench decision of the Allahabad High Court in M/s. Gobind Tobacco Manufacturing Co. & Anr. vs. State of U.P. & Ors. to argue that even if goods are backed by photocopies of valid documents, detention would be illegal.
- The petitioner also cited a Supreme Court decision in Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, emphasizing that the validity of an order must be judged by the reasons mentioned, and fresh reasons cannot be introduced later.
Legal Position Under U.P. Goods and Service Tax Act: The respondent’s counsel relied on a Supreme Court decision in State of Uttar Pradesh vs. M/s. Kay Pan Fragrance Pvt. Ltd. to argue that documents needed to be valid as per the U.P. Goods and Service Tax Act, 2017, during transit, as section 129 provides for summary proceedings.
Court’s Analysis:
- The court emphasized that the Revenue cannot change its stance once a particular ground is taken, and such changes cannot be countenanced.
- The shifting of grounds from invalid documents to issues with suppliers’ registrations indicated a lack of valid and reasonable grounds for detention.
Quashing of Detention Order: Given the clear deviation from the initial ground and the lack of valid reasons for detention, the court quashed both the detention order and the subsequent show-cause notice.
Release of Goods: The court directed the Revenue to release the goods and the vehicle of the petitioner within seven days from the date of the judgment.
Cost Restraint: While the case seemed appropriate for imposing costs on the Revenue, the court refrained from doing so based on the earnest prayer made on behalf of the respondents.
Conclusion: The Allahabad High Court’s judgment reaffirms the importance of adherence to stated grounds in detention orders and emphasizes the need for valid and reasonable grounds for such actions. The court’s decision to quash the detention order and show-cause notice underscores the significance of procedural fairness and consistency in administrative actions, particularly in matters related to the Goods and Services Tax (GST).
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. This is an application under Article 226 of the Constitution of India where the petitioner is aggrieved by the detention order dated 17.11.2023 and the subsequent show-cause notice dated 23.11.2023.
2. The case made out by the petitioner is that the goods were detained by the Revenue Department while the goods were in transit from Patna to Aligarh on the ground that the goods were not accompanied by the valid documents. It is to be noticed that in the detention order, the only ground that was taken by the Revenue Department was that no valid documents were accompanying the goods. However, it appears that in the show-cause notice, there is a complete silence with regard to the earlier reason given in the detention order and the same has been substituted by a different reason that in the GSTR 2A form, four out of other suppliers, that had been shown in the GSTR 2A, had their registrations suspended or cancelled.
3. Learned counsel on behalf of the petitioner relies upon a Division Bench judgment of the Gujarat High Court, presided by Hon’ble Mr. Justice Harsha Devani, in F.S. Enterprise vs. State of Gujarat (R/Special Civil Application Nos.7061, 7062 and 7064 of 2019, decided on 11.10.2019) to buttress the argument that if the goods seized are backed by even photocopies of the valid documents, the detention would be illegal. He further relied on a co-ordinate Bench decision of this Court in M/s. Gobind Tobacco Manufacturing Co. & Anr. vs. State of U.P. & Ors. (Writ Tax No.600 of 2022, decided on 17.5.2022) wherein the Bench held that if the goods are covered by the valid documents, any detention of the same would be totally arbitrary, illegal and without jurisdiction. In this case, costs were also imposed by the coordinate Bench. Learned counsel on behalf of the petitioner has also relied upon a decision of the Supreme Court in Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi & Ors. reported in AIR 1978 SC 851 wherein the Supreme Court in paragraph 13 held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise.
4. Per contra, learned counsel on behalf of the respondent relied upon a decision of the Supreme Court in State of Uttar Pradesh vs. M/s. Kay Pan Fragrance Pvt. Ltd. reported in 2020 (5) SCC 811 to support the argument that the law laid down under the U.P. Goods and Service Tax Act, 2017 the documents were required to be valid once the goods were in transit since section 129 is a summary proceedings. Learned counsel on behalf of the respondents submitted that a procedure is laid down and the same should be followed as per statute and the writ Court should not interfere in such matters.
Analysis & Conclusion :
5. It is trite law, settled by a catena of Supreme Court judgments, that the Revenue cannot beat around the bush and keep changing the goal post at each stage. Once the Revenue had taken a particular stand, the same cannot be completely changed and/or supplemented by a different reason or ground.
6. In the present case, it is clear that the detention was made on the ground that the goods were not accompanied by valid documents. However, when the show-cause notice was issued, there is no whisper of any invalid document whatsoever. In fact, the stand was completely changed by the Revenue and this volte face cannot be countenanced by this Court. The detention of goods causes serious prejudice to an assessee and the same can only be done on the basis of specific, valid and reasonable grounds. In the present case, it is quite obvious that at the time of detention, the ground that was stated by the Revenue was incorrect. More so, there was no reason for the Revenue to have detained the goods and the consequential actions that followed, were obviously vitiated.
7. In light of the findings above, we are of the view that the detention order and the subsequent show-cause notice were bad in law, and accordingly, both are quashed and set-aside.
8. The writ petition is, accordingly, allowed. The Revenue is directed to release the goods and the vehicle of the petitioner within a period of 7 days from date.
9. Though this is an appropriate case for imposing cost upon the Revenue as the actions of the respondents appear to be mala fide in nature, we are restraining ourselves from doing so only on the earnest prayer made on behalf of learned counsel for the respondents.
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