# M/s Calcutta South Transport Co., Kolkata v. State of U.P. & Anr

- **Citation:** (2022) 4 ILRA 929
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-28
- **Case number:** Writ Tax No. 406 of 2022
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-calcutta-south-transport-co-kolkata-v-state-of-u-p-anr-48371
- **Pages:** 6

## Headnote

A. Tax Law - Confiscation of goods or
conveyances
and
levy
of
penalty
-
CGST/UPGST Act, 2017 - Section 130 -
Code of Criminal Procedure - Section
156(3) - It is settled law that if a public
functionary
acts
maliciously
or
oppressively and the exercise of power
results in harassment and agony then it is
not an exercise of power but its abuse. No
law
provides
protection
against
it.
Harassment
by
public
authorities
is
socially
abhorring
and
legally
impermissible which causes more serious
injury to society. In modern society no
authority can arrogate to itself the power to act
in a manner which is arbitrary.

Award
of compensation
for unauthorised,
arbitrary and illegal detention of the truck of the
petitioner by the respondent authorities would
not only compensate the petitioner for loss
suffered by him but it would also help in
improving work culture and public confidence in
rule of law. (Para 10)

Once the order of confiscation dated 29.11.2020
and the order of first appellate authority dated
28.06.2021 were quashed by this Court by
judgment dated 15.11.2021, the order of
confiscation stood eclipsed from the very date of
issuance. There is no order of confiscation in
existence and, yet, the truck of the petitioner is
being unauthorisedly and illegally detained by
the respondent no. 2 since almost 18 months.
(Para 9)

Petitioner is suffering financial loss of Rs. 5000/-
per day since the date of detention of truck, i.e.
14.10.2020. Since determination of loss due to
arbitrary, illegal and unauthorised detention by
the respondent no. 2, is a question of fact,
therefore, Commissioner of Commercial Tax,
U.P., Lucknow is directed to determine the
financial loss of the petitioner in respect of the
truck in question, within three weeks from today
after affording opportunity of hearing to the
petitioner and pay it to the petitioner within
next one week through account payee bank
draft. (Para 12)

Writ petition allowed. (E-4)

Precedent followed:

## Text

4 All. M/s Calcutta South Transport Co., Kolkata Vs. State of U.P. & Anr.
929
copy of this judgment. Since the matter is a
small cause suit, that is one of the year
2004, the Trial Judge shall fix one date of
effective hearing every week. Both parties
shall appear before the Trial Court on 20th
April, 2022. There shall be no order as to
costs.

30. Let the lower court records be sent
down at once and shall be made available
to the Trial Court positively before the date
fixed for appearance of parties.
----------
(2022)04ILR A929
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.03.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 406 of 2022

M/s Calcutta South Transport Co., Kolkata
 ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Aloke Kumar

Counsel for the Respondents:
C.S.C.

A. Tax Law - Confiscation of goods or
conveyances
and
levy
of
penalty
-
CGST/UPGST Act, 2017 - Section 130 -
Code of Criminal Procedure - Section
156(3) - It is settled law that if a public
functionary
acts
maliciously
or
oppressively and the exercise of power
results in harassment and agony then it is
not an exercise of power but its abuse. No
law
provides
protection
against
it.
Harassment
by
public
authorities
is
socially
abhorring
and
legally
impermissible which causes more serious
injury to society. In modern society no
authority can arrogate to itself the power to act
in a manner which is arbitrary.

Award
of compensation
for unauthorised,
arbitrary and illegal detention of the truck of the
petitioner by the respondent authorities would
not only compensate the petitioner for loss
suffered by him but it would also help in
improving work culture and public confidence in
rule of law. (Para 10)

Once the order of confiscation dated 29.11.2020
and the order of first appellate authority dated
28.06.2021 were quashed by this Court by
judgment dated 15.11.2021, the order of
confiscation stood eclipsed from the very date of
issuance. There is no order of confiscation in
existence and, yet, the truck of the petitioner is
being unauthorisedly and illegally detained by
the respondent no. 2 since almost 18 months.
(Para 9)

Petitioner is suffering financial loss of Rs. 5000/-
per day since the date of detention of truck, i.e.
14.10.2020. Since determination of loss due to
arbitrary, illegal and unauthorised detention by
the respondent no. 2, is a question of fact,
therefore, Commissioner of Commercial Tax,
U.P., Lucknow is directed to determine the
financial loss of the petitioner in respect of the
truck in question, within three weeks from today
after affording opportunity of hearing to the
petitioner and pay it to the petitioner within
next one week through account payee bank
draft. (Para 12)

Writ petition allowed. (E-4)

Precedent followed:

1. Lucknow Development Authority Vs M.K.
Gupta, (1994) 1 SCC 243 (Para 10)

2. N. Nagendra Rao and Co. Vs St. of Andhra
Pradesh, (1994) 6 SCC 205 (Para 10)

(Delivered by Hon'ble Surya Prakash
Kesarwani, J.
&
Hon'ble Jayant Banerji, J.)
930 INDIAN LAW REPORTS ALLAHABAD SERIES

1. Heard Shri Aloke Kumar, learned
counsel for the petitioner and Shri B.P.
Singh
Kachhawaha,
learned
Standing
Counsel for the State-respondents.

2. This writ petition has been filed
praying for the following reliefs:-

"(i) Issue a suitable writ, order or
direction in the nature of mandamus
commanding the respondent no.2 to release
the vehicle no.HR 55 S 1171 [so detained
by the order dated 14.10.2020] of the
petitioner.

(ii) Issue any other suitable writ,
order or direction in favour of the petitioner
as this Hon'ble High Court may deem fit
and
proper
under
the
facts
and
circumstances of the case.

(iii) Award the cost of the petition
to the petitioner."

3. Briefly stated facts of the present
case are that the petitioner is the owner of
truck bearing registration no.HR 55 S
1171. The petitioner is engaged in the
business of leasing trucks and other
vehicles on hire/fixed freight basis to
various transporting entities. In the
course of its business, the petitioner has
given on hire the aforesaid truck in
question to one M/s Aruna Chaleswara
Transport Company (hereinafter referred
to as the 'hirer') for the purpose of
transportation of goods from Delhi to
Vijayawada (Andhra Pradesh) for a
period of 7-8 days on a consideration of
Rs.80,000/-. The hirer loaded the goods
for
transportation
from
Delhi
on
06.10.2020 for Vijayawada. In the course
of journey, the aforesaid truck was
passing through the State of Uttar
Pradesh when it was intercepted by the
respondent
no.2,
i.e.
Assistant
Commissioner (Mobile Squad) Unit-2,
Commercial Tax, Agra, who found that
some of the goods loaded in the truck are
over
and
above
those
covered
by
invoices, therefore, he issued an order of
detention dated 14.10.2020 in MOV-06.
Since neither the owner of the goods nor
the transporter, i.e., the hirer, came
forward to deposit the tax and penalty as
demanded by order dated 31.10.2020, the
respondent no.2 initiated proceedings
under Section 130 of the CGST/UPGST
Act, 2017 for confiscation of the truck in
question. In this regard, a notice in GST
MOV-10 dated 23.12.2020 was issued to
the petitioner fixing the date for hearing
on 28.11.2020. Immediately on the
receipt of the aforesaid notice, the
petitioner submitted an application dated
05.12.2020 before the respondent no.2
bringing to his notice the entire facts and
requested to release the truck. However,
in the meantime, the respondent no.2,
without affording any opportunity of
hearing to the petitioner, passed an order
of confiscation dated 29.11.2020 in GST
MOV-11.

4. Aggrieved with the aforesaid order
of confiscation dated 29.11.2020, the
petitioner filed First Appeal No.63 of 2021
before the appellate authority which was
dismissed by order dated 28.06.2021. In the
meantime, the petitioner also attempted to
lodge
a
first
information
report
on
17.12.2020 against the hirer for using the
truck for transportation of certain goods not
covered by valid invoice. Since the FIR
was not registered by the SHO, Police
Station, Alipur,
Delhi,
therefore,
the
petitioner approached the Commissioner of
Police, New Delhi through mail on
25.01.2021 and when nothing happened,
the petitioner filed an application dated
01.02.2021
in
the
court
of
Chief
Metropolitan Magistrate, District North,
4 All. M/s Calcutta South Transport Co., Kolkata Vs. State of U.P. & Anr.
931
Rohini Courts, Delhi under Section 156(3)
of the Code of Criminal Procedure, which
was registered as Criminal Case No.525 of
2021.

5. Aggrieved with the order of
confiscation
dated
29.11.2020
under
Section 130 of the CGST Act and the order
of the first appellate authority dated
28.06.2021, the petitioner filed Writ-Tax
No.650 of 2021 before this Court in which
he also prayed for a direction in the nature
of mandamus to the authorities concerned
to release the aforesaid truck detained by
order dated 14.10.2020. The aforesaid writ
petition was allowed and the orders
impugned therein were quashed by this
Court by judgment and order dated
15.11.2021. The relevant portion of the
judgment is reproduced below:-

"In the light of the aforesaid
decision, the present case has to be
considered. The facts and circumstances
narrated above reflect that the show cause
notice dated 23.12.2020 was misleading
and incorrect. Where a show cause notice
in Form GST MOV-10 is issued, which is a
preclude to possibility of imposition of
liability in the nature of civil consequences
against a person, the same has to be
specific, containing necessary and correct
particulars that may enable the noticee to
clearly understand the matter and appear or
file his reply on the date and in the manner
specified in the notice. Evidently, the
show cause notice sent in the aforesaid
Form GST MOV-10 dated 23.12.2020
does not comply with the aforesaid
requirement as the date for appearance
is stated as 28.11.2020. The quandary and
dilemma that can visit a person served with
such a show cause notice can only be
imagined. The plight of the petitioner is
well reflected in the aforesaid legal notices
a sent by him as well as his repeated efforts
to get an FIR lodged against the aforesaid
transporter and other persons. The learned
Standing
Counsel
implying
that
the
petitioner would be deemed to have
knowledge of proceedings for confiscation
because the signature of its driver appears
on the Form MOV-4, is misplaced. The
proceedings and consequences of seizure
and of confiscation are different. Had the
show cause notice Form GST MOV-10
been properly prepared, the petitioner could
have had adequate opportunity to represent
his case and, subject to such proof as
required by clause (v) of sub-section (1) of
Section 130 of the Act, would not have
been saddled with the liability under subsections (2) and (3) of Section 130 of the
Act. Therefore, the show cause notice
Form GST MOV-10 that was issued was
defective which resulted in denial of
opportunity to the petitioner, and as
such, cannot be said to be a show cause
notice in the eyes of law.

Thus, not only have the principles
of natural justice not been complied with
by the respondents, the petitioner has also
been prejudiced by such non-compliance.
There is no material on record to
demonstrate that an opportunity of
hearing
was
duly
granted
to
the
petitioner as is the mandate of subsection (4) of Section 130 of the Act.

Under the circumstances, the
order dated 28.06.2021 (as corrected on
25.09.2021) passed by the Additional
Commissioner Grade II (Appeal)-I, State
Tax, Agra as well as the order dated
29.11.2020 Form GST MOV-11 passed by
the
Assistant
Commissioner
(Mobile
Squad) Unit-2, Commercial Tax, Agra
cannot be sustained and are hereby
quashed. However, in the interest of
justice, it is left open to the respondents to
issue a fresh show cause notice to the
932 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioner
and
proceed
thereafter
in
accordance with law.

Subject
to
the
aforesaid
observations, this writ petition is allowed."

 (emphasis supplied)

6. Despite the aforesaid judgment
dated 15.11.2021, the respondents have
neither issued any fresh notice to the
petitioner nor have released the truck so
far although there exists no order of
confiscation.

7. Learned Standing Counsel has
produced before us the written instructions
of the respondent no.2 dated 15.03.2022
which also leaves no manner of doubt that
no notice has been issued to the petitioner
pursuant to the liberty granted by this Court
by judgment dated 15.11.2021. The written
instructions of the respondent no.2 dated
15.03.2022,
as
produced
by
learned
Standing Counsel, are kept on record. The
relevant
portion
of
the
aforesaid
instructions of the respondent no.2 is
reproduced below:-

"उक्त के सम्बन्ध आपको अवगत
कराना िै सक सचल दल कायाालय में पुनः
सुनवाई िेतु पोिाल पर नोसिस जाऱी करने क़ी
कोई व्यवस्र्था नि़ीं द़ी गई िै। अतः मानऩीय
उज्ज्ञ न्यायलय द्वारा पाररत आदेश के अनुपालन
में
ज्वाइंि
कसमश्रर
(आई०ि़ी०)
अनुिाग
वासणिकर लिनऊ (ज्वा0कसम० सवसध प्रकोष्ठ
को/प्रसतसलसप प्रेसषत) को इस कायाालय के पत्र
संख्या 178 सद० 21/12/2021 अनुस्मारक पत्र
संख्या
187
सदनांक05/01/2022,
सद्वत़ीय
अनुस्मारक पत्र संख्या 189 सद० 13/01/2022,
तृत़ीय अनुस्मारक पत्र संख्या 195 सद०
03/02/2022, चतुर्था अनुस्मारक पत्र संख्या 201
सद० 24/02/2022 एवं पंचम अनुस्मारक पत्र
संख्या 226 सद० 14/03/2022 प्रेसषत कर सनवेदन
सकया गया िै सक पुनः नोसिस जाऱी करने क़ी
सुसवधा सचलदल कायाालय को उपलब्ध कराने
क़ी कृपा करें तासक मानऩीय उच्च न्यायालय के
आदेश का पालन सुनसित सकया जा सके। सकन्तु
आज तक पुनः सनवाई िेतु नोसिस जाऱी करने
का कोई सवकल्प सविाग़ीय साईि पर उपलब्ध
नि़ीं कराया गया िै।"

8. Section 130 of the CGST Act 2017
provides for confiscation of goods or
conveyances and levy of penalty, as under
:-

"130. Confiscation of goods or
conveyances and levy of penalty.-- (1)
Notwithstanding anything contained in this
Act, if any person--

(i) supplies or receives any goods
in contravention of any of the provisions of
this Act or the rules made there under with
intent to evade payment of tax; or

(ii) does not account for any
goods on which he is liable to pay tax
under this Act; or

(iii) supplies any goods liable to
tax under this Act without having applied
for registration; or

(iv) contravenes any of the
provisions of this Act or the rules made
there under with intent to evade payment of
tax; or

(v) uses any conveyance as a
means of transport for carriage of goods in
contravention of the provisions of this Act
or the rules made there under unless the
owner of the conveyance proves that it was
so
used
without
the
knowledge
or
connivance of the owner himself, his agent,
if any, and the person in charge of the
conveyance, then, all such goods or
conveyances shall be liable to confiscation
and the person shall be liable to penalty
under section 122.
4 All. M/s Calcutta South Transport Co., Kolkata Vs. State of U.P. & Anr.
933

(2) Whenever confiscation of any
goods or conveyance is authorised by this
Act, the officer adjudging it shall give to
the owner of the goods an option to pay in
lieu of confiscation, such fine as the said
officer thinks fit:

Provided that such fine leviable
shall not exceed the market value of the
goods confiscated, less the tax chargeable
thereon:

Provided
further
that
the
aggregate of such fine and penalty leviable
shall not be less than the amount of penalty
leviable under sub-section (1) of section
129:

Provided also that where any
such conveyance is used for the carriage
of the goods or passengers for hire, the
owner of the conveyance shall be given
an option to pay in lieu of the
confiscation of the conveyance a fine
equal to the tax payable on the goods
being transported thereon.

(3) Where any fine in lieu of
confiscation of goods or conveyance is
imposed under sub-section (2), the owner
of such goods or conveyance or the person
referred to in sub-section (1), shall, in
addition, be liable to any tax, penalty and
charges payable in respect of such goods or
conveyance.

(4) No order for confiscation of
goods or conveyance or for imposition of
penalty shall be issued without giving the
person an opportunity of being heard.

(5)
Where
any
goods
or
conveyance are confiscated under this Act,
the title of such goods or conveyance shall
thereupon vest in the Government.

(6) The proper officer adjudging
confiscation shall take and hold possession
of the things confiscated and every officer
of Police, on the requisition of such proper
officer, shall assist him in taking and
holding such possession.

(7) The proper officer may, after
satisfying himself that the confiscated
goods or conveyance are not required in
any other proceedings under this Act and
after
giving
reasonable
time
not
exceeding three months to pay fine in
lieu of confiscation, dispose of such goods
or conveyance and deposit the sale
proceeds thereof with the Government."

9. Once the order of confiscation
dated 29.11.2020 and the order of first
appellate authority dated 28.06.2021 were
quashed by this Court by judgment dated
15.11.2021, the order of confiscation stood
eclipsed from the very date of issuance.
There is no order of confiscation in
existence and, yet, the truck of the
petitioner is being unauthorisedly and
illegally detained by the respondent no.2.
About 18 months have passed since the
detention of the aforesaid truck without any
valid order for confiscation or any
proceeding of confiscation in existence,
yet, the truck in question is being detained
by the respondent no.2 arbitrarily, illegally
and unauthorisedly, resulting in harassment
of the petitioner.

10. It is settled law that if a public
functionary
acts
maliciously
or
oppressively and the exercise of power
results in harassment and agony then it is
not an exercise of power but its abuse. No
law
provides
protection
against
it.
Harassment by public authorities is socially
abhorring and legally impermissible which
causes more serious injury to society. In
modern society no authority can arrogate to
itself the power to act in a manner which is
arbitrary. It is unfortunate that matters
which require immediate attention for
compliance of order of this Court, linger on
leaving the petitioner to run from one end
to other with no result. Therefore, award of
934 INDIAN LAW REPORTS ALLAHABAD SERIES
compensation for unauthorised, arbitrary
and illegal detention of the truck of the
petitioner by the respondent authorities
would not only compensate the petitioner
for loss suffered by him but it would also
help in improving work culture and public
confidence in rule of law. The principles of
law aforestated also find support from the
law laid down by Hon'ble Supreme Court
in Lucknow Development Authority vs.
M.K. Gupta; (1994) 1 SCC 243 and N.
Nagendra Rao and Company vs. State of
Andhra Pradesh; (1994) 6 SCC 205.

11. In paragraph 46 of the writ
petition, the petitioner has stated that the
petitioner is facing recurring financial loss
due to detention of its truck since
14.10.2020.
In
paragraph
8
of
the
application dated 05.12.2020 submitted by
the petitioner before the respondent no.2, it
has been stated as under :-

"8. That due to keeping of the
said truck under custody my client is not
in a position to run his business and he is
paying salary to the driver and he is
bearing bank EMI. Taxes and Insurances
of that truck and in the manner aforesaid
he is suffering loss at least Rs.5,000/- per
day."

12. Thus, as per pleadings, the
petitioner is suffering financial loss of
Rs.5000/- per day since the date of detention
of truck, i.e. 14.10.2020. Since determination
of loss due to arbitrary, illegal and
unauthorised detention by the respondent
no.2, is a question of fact, therefore, we direct
the Commissioner of Commercial Tax, U.P.,
Lucknow to determine the financial loss of
the petitioner in respect of the truck in
question, within three weeks from today after
affording opportunity of hearing to the
petitioner and pay it to the petitioner within
next one week through account payee bank
draft.

13. For all reasons stated above, the
writ petition is allowed with cost. The
respondents are directed to release forthwith
the truck bearing registration no.HR 55 S
1171.

14. For grossly arbitrary, illegal and
unauthorised action of the respondent no.2 to
detain the truck in question even despite the
judgment of this Court dated 15.11.2021, we
impose
cost
of
Rs.5000/-
upon
the
respondents which shall be deposited by the
respondents with the High Court Legal
Services Committee, High Court, Allahabad
within three weeks from today.

15. With the aforesaid directions, the
writ petition is allowed.
----------
(2022)04ILR A934
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 18.04.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
THE HON'BLE SUBHASH VIDYARTHI, J.

Writ Tax No. 41 of 2022

Distributors India (South) ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Shailesh Verma

Counsel for the Respondents:
Manish Misra

A. Tax Law - Reassessment - Uttar
Pradesh
Krishi
Evam
Prodyogik
Vishwavidyalaya
Adhiniyam,
1988
-