GST transit goods and vehicle detention for e-way bill checks-missing s.129(3) 7-day notice/order timelines led to release.

Detention of goods and conveyance under s.129 GST was challenged on the ground that the proper officer failed to comply with the mandatory timelines in s.129(3). The HC held that, upon detention/seizure, the authority must issue a penalty notice within 7 days and thereafter pass an order within 7 days of service; non-compliance vitiates continued detention. Since no notice or penalty order under s.129(3) was issued after the detention order in Form GST MOV-06, and a later Form GST MOV-10 under s.130 was issued after nearly three months without lawful justification, the detention order was quashed and the detained goods and conveyance were directed to be released forthwith. Petition allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether a detention order issued in Form GST MOV-06 under Section 129(1) could be sustained when the proper officer admittedly failed to issue the statutory notice specifying penalty and to pass the consequent penalty order within the timelines mandated by Section 129(3).

(ii) Whether subsequent issuance of a notice in Form GST MOV-10 under Section 130, after a substantial delay, justified continuation of detention or defeated the challenge to the detention order under Section 129.

(iii) What consequential relief and conditions were appropriate upon quashing the detention order for non-compliance with Section 129(3), including directions regarding pending proceedings under Section 130.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Effect of non-compliance with Section 129(3) timelines on detention under Section 129

Legal framework (as discussed by the Court): The Court examined Section 129(3), which mandates that the proper officer detaining or seizing goods or conveyance "shall" (a) issue notice within seven days of detention or seizure specifying the penalty payable, and (b) thereafter pass an order within seven days from service of such notice for payment of penalty under Section 129(1)(a) or (b).

Interpretation and reasoning: The Court treated the Section 129(3) timelines as incumbent and mandatory. It found it undisputed that after the detention order in Form GST MOV-06 dated 06.05.2025, no notice for penalty as required by Section 129(3) was issued and no penalty order under Section 129(1)(a) or (b) was passed. The Court considered this failure to comply with the statutory sequence and time limits as fatal to the continuance of detention under Section 129.

Conclusions: Since the statutory notice and order contemplated by Section 129(3) were not issued/passed within the prescribed time, the detention order in Form GST MOV-06 dated 06.05.2025 was held unsustainable and liable to be quashed and set aside.

Issue (ii): Whether delayed initiation under Section 130 (Form GST MOV-10) cured the illegality under Section 129

Legal framework (as discussed by the Court): The Court noted that the authorities issued Form GST MOV-10 under Section 130 on 06.08.2025, i.e., nearly three months after the detention order. The respondents asserted that Section 130 does not stipulate a timeline for issuance of such notice.

Interpretation and reasoning: The Court held that the admitted non-compliance with Section 129(3) could not be justified by later issuance of a Section 130 notice. The Court also found the explanation for delay (changes of officers, workload, and health issues) did not alter the statutory requirement under Section 129(3) that had not been followed at all. Accordingly, the pendency or issuance of Form GST MOV-10 did not render the challenge to the Section 129 detention infructuous or validate the detention order.

Conclusions: The subsequent Form GST MOV-10 under Section 130 did not salvage or sustain the defective detention under Section 129; the detention order still had to be quashed for breach of Section 129(3).

Issue (iii): Consequential relief-release of goods/conveyance and conditions relating to Section 130 proceedings

Interpretation and reasoning: Having found the detention order illegal for contravention of Section 129(3), the Court granted immediate consequential relief by directing release of the detained goods and conveyances. At the same time, the Court expressly preserved the authority's ability to proceed under Section 130 on the already issued Form GST MOV-10, subject to procedural fairness and the petitioner's participation.

Conclusions: (a) The Court quashed and set aside the detention order in Form GST MOV-06 dated 06.05.2025 and directed the respondents to release the goods and the conveyances forthwith. (b) The Court directed the petitioner to file a reply to the Form GST MOV-10 dated 06.08.2025 within 15 days from receipt of the Court's order and also to file an undertaking to pay fine in lieu of confiscation if any order under Section 130 is passed after hearing. (c) If the petitioner fails to file the reply/undertaking as directed, the authority was left free to pass an order under Section 130 in accordance with law.

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