Release of consignment: detention order must precede show cause notice, strict time limits enforced, proceedings quashed.

Challenge to detention and release of consignment on procedural grounds focusing on time limits and formalities. The court found the order of detention and the show cause notice were not issued in accordance with the required sequence and timelines, noting that the detention order must precede the show cause notice and that the show cause notice must be issued within the prescribed seven-day period; the conversion of 'three working days' to 'three days' precludes reliance on holidays to extend timelines, and failures in required Form GST MOV-03 authorization, service of extension, and uploading of Part-B of Form GST EWB-03 vitiated the proceedings, resulting in allowance of the petition.

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Issues Involved:
1. Legality of the detention of the consignment.
2. Adherence to procedural requirements under the Goods and Services Tax Act, 2017.
3. Validity of the actions taken by the respondents in light of statutory and procedural guidelines.

Issue-wise Detailed Analysis:

1. Legality of the Detention of the Consignment:
The petitioner sought a mandamus directing the respondents to release the consignment of Polystardone XL-10, which was intercepted and detained on 13.08.2022 by the Commercial Taxes Department. The court noted that no formal order of detention had been issued. The interception was based on the officer's presumption that the goods were to be unloaded at an unregistered place, but no reasons or details were provided for this assumption. The court emphasized that without a formal order of detention, the consignment should not have been retained by the authorities, as per the proviso to Section 129(1) of the Goods and Services Tax Act, 2017.

2. Adherence to Procedural Requirements Under the Goods and Services Tax Act, 2017:
The court examined the sequence of events and the forms issued post-interception. It was noted that several procedural lapses occurred:
- Form GST MOV-01 (statement of the driver) and Form GST MOV-02 (order of physical verification) were issued on 13.08.2022.
- No GST EWB-03 Part A report was prepared within 24 hours.
- No written permission in Form GST MOV-03 was obtained for an extension of time beyond three working days for the conclusion of the inspection.
- Form GST MOV-04 (report of physical verification) was issued on 13.08.2022, but no final report in GST EWB-03 Part B was uploaded within three days.
- The order of detention (Form GST MOV-06) and show cause notice under Section 129(3) were issued on 22.08.2022 but dispatched only on 24.08.2022, beyond the prescribed timeline.

3. Validity of the Actions Taken by the Respondents:
The court found that the respondents did not follow the statutory and procedural guidelines properly. The learned Additional Government Pleader's argument that the limitation of seven days could be extended due to holidays was rejected. The court highlighted that the GST Department operates 24/7, and the concept of 'working day' and 'holiday' does not apply in such matters. The failure to issue the order of detention within the prescribed timeline of seven days from the date of detention/seizure was a serious flaw that vitiated the entire proceedings. Additionally, the court rejected the argument that the directions in Form GST MOV-02 could be considered an order of detention, as there is a critical difference between directing the driver to station the vehicle and issuing a formal order of detention.

Conclusion:
The court concluded that the procedure followed by the respondents was contrary to statutory requirements and the instructions issued by the Commissioner. The submissions of the revenue that the Circular has no statutory force and the instructions thereunder are flexible were rejected. The court granted the mandamus as sought by the petitioner and allowed the writ petition, directing the release of the consignment.

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