Premature GST detention penalty order set aside for denying the statutory seven-day reply period and natural justice

A detention-related penalty under the CGST Act was challenged on the ground that it was passed before expiry of the seven-day period granted in Form GST MOV-07 for filing a reply to the show cause notice. The court noted that the premature order deprived the assessee of the statutory opportunity to respond and amounted to a breach of natural justice. The penalty order was therefore unsustainable and was set aside, with the matter remanded for fresh consideration after granting due opportunity of hearing.

---

---

Issues: Whether the penalty order confirming detention-related penalty was liable to be set aside for being passed before expiry of the seven-day period for reply and for violation of natural justice.

Analysis: Form GST MOV-07 issued under Section 129(3) of the Central Goods and Services Tax Act, 2017 provided seven days to reply to the show cause notice. The penalty order was passed before that period expired, resulting in denial of the statutory opportunity to respond and inadequate hearing.

Conclusion: The penalty order was unsustainable and was set aside, with the matter remanded for fresh consideration after granting due opportunity of hearing.

---