LI Network
Published on: 16 July 2023 at 12:03 IST
In the case of Sangam Wires Vs State of Bihar, the Patna High Court ruled that penalties cannot be imposed under Section 129(3) of the Central Goods and Services Tax (CGST) Act without conducting a hearing as mandated by Section 129(4) of the Act. This ruling upholds the principles of natural justice and emphasizes the significance of allowing a fair opportunity for a hearing prior to imposing penalties.
The court’s decision is centered around a situation where a vehicle was intercepted for moving without a valid e-way bill, resulting in the imposition of a penalty under Section 129(3) of the CGST Act. The court observed that the officer had issued a notice under Section 129(1)(a) and simultaneously imposed the penalty, without providing the petitioner with a chance to present their case.
This action contradicted the principles of natural justice. The court stressed the need for strict adherence to the due process outlined in the Act. It also highlighted the importance of the adjudicating authority considering all relevant factors, including any genuine reasons that may have led to the violation, before imposing penalties.
In conclusion, the ruling of the Patna High Court in the case of Sangam Wires Vs State of Bihar underscores the significance of following procedural requirements as established by law. It emphasizes the crucial role of granting a fair opportunity for a hearing before imposing penalties, thereby upholding the principles of natural justice.
This landmark case sets a precedent for ensuring proper administrative conduct under the CGST Act and reiterates the importance of adhering to the due process of law.
