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of <h1>Detention and confiscation orders under Section 129 quashed for failing to serve mandatory show-cause notice under s.129(3)</h1> <h3>M/s Mlv Constructions Thru. Authorized Signatory Versus State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Govt. Of U.P. Lko. And Another</h3> M/s Mlv Constructions Thru. Authorized Signatory Versus State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Govt. Of U.P. Lko. And Another - 2025:AHC - ... ISSUES PRESENTED AND CONSIDERED 1. Whether orders of detention/seizure and consequential penalty orders passed without valid service of notice under Section 129(3) of the Central Goods and Services Tax Act, 2017 are vitiated for non-compliance of the statutory notice requirement and the opportunity of hearing mandated by Section 129(4). 2. Whether a show-cause notice under Section 129(3) may be treated as validly issued by presuming that the owner/consignee will be informed by the driver/transporter, in absence of any proof of actual service to the owner/consignee. 3. Whether an assessing/enforcement officer who has not ensured compliance with statutory procedure and who appears not to be familiar with the governing provisions can lawfully be entrusted with seizure duties without remedial administrative steps. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of detention/seizure orders without service of notice under Section 129(3) Legal framework: Section 129(3) requires the proper officer detaining or seizing goods or conveyance to issue a notice within seven days of such detention/seizure specifying the penalty payable and thereafter to pass an order within seven days from the date of service of such notice for payment of penalty under sub-section (1). Section 129(4) provides that no penalty under sub-section (3) shall be determined without giving the person concerned an opportunity of being heard. Precedent treatment: The judgment does not rely on or discuss any authority or precedent; the Court decides on statutory construction and procedural compliance alone. Interpretation and reasoning: The Court finds that no evidence was produced to demonstrate service of the statutorily mandated show-cause notice on the owner/consignee within the seven-day period. The officer's internal instructions failed to enclose the purported notice and, on questioning, the officer could not produce or identify any compliant service. The statutory timeline and the requirement of service are treated as mandatory preconditions to determination of penalty. Ratio vs. Obiter: Ratio - The impugned orders imposing penalty and/or treating the driver as liable are set aside because they were made in clear violation of the mandatory notice and opportunity provisions in Section 129(3) and (4). The requirement for service of notice and an opportunity of personal hearing is essential and non-dispensable. Conclusions: Orders passed without compliance with Section 129(3) and (4) are invalid and liable to be quashed. The authority is directed to issue a fresh show-cause notice in compliance with Section 129(3) and to consider any reply and afford personal hearing before passing a reasoned and speaking order. Issue 2: Legality of presuming notice to owner/consignee via driver/transporter Legal framework: Statutory notice under Section 129(3) must be served on the person concerned as envisaged by the Act; service by presumption is not provided for by the text of the provision. Precedent treatment: No prior decisions are cited; the Court treats the point on statutory grounds. Interpretation and reasoning: The officer's later contention that he presumed the owner would be informed by the driver/transporter contradicts his earlier assertion that a formal show-cause notice was issued and ignored. The Court treats presumption of notice via intermediary (driver/transporter) as insufficient-especially in absence of documentary proof of such communication-because it subverts the express service requirement and the protective purpose of Section 129(4). Ratio vs. Obiter: Ratio - Service cannot be assumed by informal transmission through the driver/transporter; express compliance with statutory modes of notice is required. Obiter - The Court's remarks emphasize the procedural impropriety and caution against informal practices, but the dispositive finding is statutory non-compliance. Conclusions: Presumption that the owner would learn of seizure through the driver/transporter does not fulfil the statutory service requirement; such an approach vitiates subsequent penalty proceedings. Issue 3: Administrative competency of the officer and remedial administrative directions Legal framework: Administrative competence and adherence to statutory procedures bear upon legality of enforcement actions; courts may issue directions to ensure statutory compliance and proper administration of law. Precedent treatment: No precedents invoked; the Court exercises supervisory jurisdiction to address administrative deficiency detected during proceedings. Interpretation and reasoning: The Assistant Commissioner who handled the seizure could not produce required documents and expressed unfamiliarity with the statutory provisions. The Court infers a need for administrative remediation to prevent recurrence of procedural lapses. The remedial direction for training flows from the officer's admitted lack of knowledge and the objective of ensuring lawful exercise of seizure powers. Ratio vs. Obiter: Ratio - Where an enforcement officer evidences ignorance of statutory requirements leading to flawed actions, the Court may set aside affected orders and require remedial administrative measures (here, training) before entrusting seizure duties to that officer. Obiter - Observations about promotion by seniority and general administrative practice are ancillary to the finding of procedural invalidity. Conclusions: The Court directs the competent Commissioner to send the officer for three months' training in the Act before reassigning seizure responsibilities; this administrative remedy accompanies the quashing of the impugned orders. Remedial and procedural directions (consequential to above issues) Legal framework: Supervisory power to secure compliance with statutory procedure and to order fresh proceedings conducted in accordance with law. Interpretation and reasoning: In light of statutory breach, the Court sets aside the impugned orders and mandates that a fresh show-cause notice be issued within one week, sent by Registered Post and by SMS and e-mail to the assessee/consigner/consignee; the addressee shall be permitted to reply within the statutory time and a reasoned, speaking order shall follow, with personal hearing if penalty is to be imposed. Ratio vs. Obiter: Ratio - Quashing of defective orders and specifying the mode/timing of re-notice and adjudication are direct remedies required by the statutory scheme. Obiter - Specific modes of communication (SMS/e-mail) are pragmatic directions to ensure notice but follow from the primary requirement of effective service. Conclusions: The authority must re-issue the show-cause notice in strict conformity with Section 129(3) and afford the statutory opportunity of hearing under Section 129(4) before determining any penalty; the court's directions on modes and timing of service and on training are mandatory consequences of the procedural breach.
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