Delayed GST Notice Beyond 7-Day Limit Invalidated, Goods Release Ordered Under Section 129(3)

HC ruled that a GST notice issued beyond the statutory seven-day limitation period under Section 129(3) is invalid. The notice concerning goods/conveyance detention was dispatched after the prescribed timeframe, rendering it legally ineffective. The court quashed the impugned notice and directed release of the detained goods, while preserving respondent's right to impose penalties through alternate legal mechanisms.

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Issues:
The judgment involves the challenge of an impugned notice in Form GST Mov-07 dated 05.09.2023, based on the contention that it was issued beyond the period of limitation prescribed under Section 129(3) of the Central Goods and Services Tax (CGST) Act, 2017.

Issue 1: Challenge of Impugned Notice

The petitioner challenged the impugned notice in Form GST Mov-07, arguing that it was issued beyond the period of limitation specified under Section 129(3) of the CGST Act, 2017. The goods/conveyance were intercepted on 30.08.2023, and subsequent actions were taken, including the issuance of a notice for physical verification on the same day. However, the petitioner received the notice on 08.09.2023, exceeding the statutory limitation period. The petitioner contended that the notice should lapse due to the limitation prescribed under the Act.

Issue 2: Interpretation of Section 129(3) of TNGST Act, 2017

The argument revolved around the interpretation of Section 129(3) of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, which mandates the issuance of a notice within seven days of detention or seizure of goods. The Court noted that the notice should have been issued within seven days from the date of detention or seizure, not from the following date. As per the Act, the last date for issuing the impugned notice would have been 06.09.2023. However, the notice was dispatched via email on 07.09.2023, after the expiration of the limitation period.

Judgment

The Court, after considering the arguments, held that the impugned notice should have been issued within seven days of detention or seizure, as per Section 129(3) of the TNGST Act, 2017. Since the notice was dispatched after the prescribed period, it was deemed invalid. Consequently, the Court quashed the notice and directed the respondent to release the goods/conveyances of the petitioner, if not already done. The respondent was granted liberty to impose penalties under other provisions of the Act, following due process. As a result, the Writ Petition was allowed with no costs incurred.

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