Legal Challenge Succeeds: GST Detention Order Quashed Due to Procedural Violations in Statutory Notice Timelines

The HC allowed the writ petition challenging a detention order under the Tamil Nadu GST Act. The court found procedural violations in the detention and show cause notice, specifically non-compliance with statutory timelines under Section 129. Consequently, the detention order was set aside, and the vehicle was ordered to be released immediately, with connected petitions closed.

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Issues: Challenge to detention order and demand of tax and penalty under Tamil Nadu Goods and Services Tax Act, 2017.

Analysis:
1. The petitioner challenged an order of detention dated 11.08.2022 and a demand of tax and penalty dated 13.09.2022 under the Tamil Nadu Goods and Services Tax Act, 2017.

2. The petitioner transported a second-hand Tata Hitachi Excavator, intercepted on 01.08.2022 at Ammapet Bye Pass junction, Salem. The driver's statement was recorded on the same day, and physical verification orders were issued simultaneously.

3. The petitioner argued that no permission was sought or received for extending the period for issuing the physical verification order. No detention order was passed within the specified period under Section 129, nor was a show cause notice issued within 7 days as mandated by Section 129(3) of the Act.

4. Referring to a previous case, the court emphasized the importance of adhering to statutory timelines from vehicle interception to the final penalty order. The authority must issue a detention order before the show cause notice, which was not done in this case.

5. Notably, in this case, the detention order was passed on 11.08.2022, after the interception on 01.08.2022, and the show cause notice was issued on 16.08.2022, violating the timelines specified under Section 129, rendering the proceedings invalid.

6. The Government Advocate mentioned a previous petition where the petitioner was allowed to reply to the show cause notice, suggesting that any delay had been condoned. However, the court found no merit in this argument as the delay issue was not raised earlier, and the direction was to consider the reply according to the law.

7. The petitioner's reply highlighted the statutory timeline and the court's previous judgment, expecting the authority to consider these aspects. Since the authority failed to do so, the court found in favor of the petitioner due to the clear lapses in adhering to statutory timelines.

8. Consequently, the impugned orders were set aside, and the vehicle was ordered to be released immediately. The Writ Petition was allowed without costs, and connected Miscellaneous Petitions were closed.

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