Blog No. 63: Compensation awarded to petitioner for unauthorised, arbitrary and illegal detention of the truck

It is settled law that if a public functionary acts maliciously or oppressively and the exercise of power results in harassment, then it is not an exercise of power but its abuse. Harassment by public authorities is socially and legally impermissible which causes more serious injury to society. Therefore, award of compensation for unauthorised, arbitrary and illegal detention of the truck of the petitioner by the 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.

Read more about the case M/s Calcutta South Transport Company Versus State of U.P and Anr. reported as 2022 (4) TMI 351 below:

Facts of the case:

1. Petitioner is the owner of truck and 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 for the purpose of transportation of goods.
2. In the course of journey, the aforesaid truck passed through the State of Uttar Pradesh when it was intercepted by the 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.
3. 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, the proceedings under Section 130 of the CGST/UPGST Act, 2017 for confiscation of the truck in question initiated. In this regard, a notice was issued to the petitioner fixing the date for hearing.
4. Immediately on the receipt of the aforesaid notice, the petitioner submitted an application before the Assistant Commissioner bringing to his notice the entire facts and requested to release the truck. However, in the meantime, without affording any opportunity of hearing to the petitioner, officer passed an order of confiscation.
5. Aggrieved with the aforesaid order of confiscation, the petitioner filed First Appeal before the appellate authority which was dismissed. In the meantime, the petitioner also attempted to lodge a First Information Report against the hirer for using the truck for transportation of certain goods not covered by valid invoice. Since the FIR was not registered, therefore, the petitioner approached the Commissioner of Police, New Delhi through mail and when nothing happened, the petitioner filed an application in the court of Chief Metropolitan Magistrate under Section 156(3) of the Code of Criminal Procedure, which was registered as Criminal Case.
6. Aggrieved with the order of confiscation under Section 130 of the CGST Act and the order of the first appellate authority, the petitioner filed Writ before this Court in which he also prayed for a direction to the authorities concerned to release the aforesaid truck detained by order.
7. Said writ petition was allowed and the excerpt of the order is reproduced below for reference:

“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 petitioner and proceed thereafter in accordance with law.”

8. 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.

Issue before the Court

9. The petitioner has prayed to issue suitable order in the matter and also to award costs.

Decision of the Court

10. Once the orders of confiscation and the first appellate authority were quashed by this Court, the order of confiscation stood eclipsed from the very date of issuance. Yet, the truck of the petitioner is being unauthorisedly and illegally detained.
11. Since determination of loss due to arbitrary, illegal and unauthorised detention was a question of fact, therefore, court directed 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 the date of order after affording opportunity of hearing to the petitioner and pay it to the petitioner within next one week through account payee bank draft.
12. For all reasons stated above, the writ petition was allowed with cost. The respondents are directed to release forthwith the truck.
13. For grossly illegal and unauthorised action of the respondent to detain the truck in question even despite the judgment of the Court, a cost of ₹ 5000/- was imposed upon the respondents which is to be deposited by the respondents with the High Court Legal Services Committee, High Court, Allahabad within three weeks from the date of order.

Our Remarks

14. Even though the technical restrictions of the portal did not permit the respondent authorities to proceed further in the matter, importance of the position of law cannot be whittled down.
15. The detention of truck as well as goods was totally injustice on part of petitioner. In a case of oppressive exercise of power resulting in harassment of an petitioner, such kind of orders will boost easeness of doing business.