LI Network
Published on: December 28, 2023 at 10:50 IST
In a significant ruling, the Allahabad High Court has emphasized that revenue authorities cannot alter their stance during subsequent proceedings arising from the same detention of goods.
The bench, comprising Justice Siddhartha Varma and Justice Shekhar B. Saraf, dismissed the detention order and related proceedings while underscoring the principle that the revenue cannot consistently change its position at each stage of legal proceedings.
The case, titled Jitendra Kumar v. State of U.P. and Another, involved goods belonging to the petitioner in transit from Patna to Aligarh, which were detained based on the sole ground that they lacked valid documentation.
However, upon close scrutiny, the Court found discrepancies between the grounds mentioned in the detention order and those stated in the subsequent show cause notice issued to the petitioner.
The show cause notice cited reasons unrelated to the absence of valid documentation, claiming that the registration of the petitioner’s four suppliers had been either suspended or canceled.
The Court noted this stark inconsistency and criticized the silence regarding the reasons outlined in the initial detention order.
Counsel for the petitioner argued that the detention of goods becomes unlawful even if supported by photocopies of valid documents, citing precedents such as F.S. Enterprise vs. State of Gujarat and M/s. Gobind Tobacco Manufacturing Co. & Anr. vs. State of U.P. & Ors.
Drawing inspiration from the Supreme Court’s ruling in Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi & Ors., which emphasized that orders must be justified by the reasons stated therein, the petitioner’s counsel maintained that reasons could not be supplemented by subsequent affidavits.
The respondent’s counsel, defending the detention order, invoked the procedural requirements outlined in the GST Act. However, the Court noted the absence of any mention of invalid documents in the show cause notice and criticized the Revenue’s abrupt change in stance.
Concluding that the detention had unfairly prejudiced the assessee, the Court declared it illegal, and the subsequent show cause notice was deemed vitiated. Consequently, both the detention order and the show cause notice were quashed.
While the Court contemplated imposing costs, it refrained from doing so based on the counsel’s representation for the respondent. This ruling serves as a reminder that procedural fairness and consistency are paramount in revenue-related legal proceedings.
