Statutory Detention Invalidated: Procedural Lapses Render CGST Act Vehicle Seizure Unlawful Under Section 129(3)

HC ruled in favor of petitioner challenging vehicle detention under CGST Act. The court found procedural violations in detention timeline, specifically exceeding statutory seven-day period for notice and order issuance. Vehicle discrepancies were deemed minor, and non-compliance with Section 129(3) provisions led to detention order being set aside, resulting in immediate vehicle and goods release.

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Issues:
The judgment involves issues related to the detention and order passed under section 129(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) based on the grounds of limitation.

Detention and Notice Period:
The petitioner, a carrier transporting tobacco, had their vehicle intercepted on 22.12.2023, but the detention order was issued on 28.12.2023, and the notice under section 129(3) of the CGST Act was served on 05.01.2024, beyond the seven-day period prescribed by the Act. The subsequent order passed on 15.01.2024 was also beyond the stipulated time frame. The petitioner argued that the delay in detention and notice issuance violated the statutory provisions.

Contentions of Petitioner and State:
The petitioner's counsel highlighted the delay in detention and notice issuance, citing a circular directing to ignore negligible defects. On the other hand, the State's counsel stated that the detention occurred after the driver's application for physical verification on 28.12.2023, leading to the notice being issued on 05.01.2024. The State justified the timeline of events leading to the detention and subsequent proceedings.

Non-Obstante Clause and Vehicle Discrepancy:
The judgment noted that the vehicle was intercepted on 22.12.2023, and there was no justification for delaying the verification of goods until the driver's application. Section 129 empowers detention or seizure of goods in transit contravening CGST Act provisions. The discrepancy in vehicle numbers recorded in e-way bills and actual transport was addressed, considering a circular allowing for errors in vehicle number digits.

Legal Provisions and Conclusion:
The judgment cited Section 129(3) of the CGST Act, emphasizing the clear limitation period for issuing notice and passing orders post-detention. As the officers did not adhere to these provisions, the demand was deemed unsustainable, leading to the orders for vehicle detention being set aside, and immediate release of the vehicle with goods was ordered. Ultimately, the petition was allowed, favoring the petitioner's arguments.

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