2025 (12) TMI 1732 - HC - GST

GST goods detention and penalty u/s129(3) challenged for late MOV-09 order; detention and notices quashed.

Detention and penalty proceedings under s.129 CGST/GGST Act were challenged on the ground that the adjudication order under s.129(3) was issued beyond the ... Challenge to detention proceedings - Order was passed beyond period of limitation (7 days) u/s 129(3) - Jurisdiction to pass such order - vehicle number in the E-Way Bills was wrongly entered - HELD THAT:- There is violation of provisions of Section 129(3) of the CGST Act as the order dated 19.11.2025 has been passed beyond the period of 7 days from the date of service of notice. In present case, the notice in Form GST MOV-07 was issued on 10.11.2025 and the order dated 19.11.2025 and hence the present petition succeeds only on this sole ground. The impugned order in Form GST MOV-09 dated 19.11.2025, notice in Form GST MOV-07 dated 10.11.2025 under section 129 of the CGST/GGST Act, 2017 and order of detention in Form GST MOV-06 dated 09.11.2025 under section 129(1) of the CGST/GGST Act, 2017 are quashed and set aside. Petition allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the detention proceedings under Section 129 of the CGST/GGST Act were vitiated for non-compliance with Section 129(3), inasmuch as the penalty order was not passed within seven days from the date of service/issuance of the notice in Form GST MOV-07. (ii) Consequentially, whether the notice in Form GST MOV-07, the detention order in Form GST MOV-06, and the penalty order in Form GST MOV-09 were liable to be quashed on the above statutory breach. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Non-compliance with the time limit under Section 129(3) of the CGST/GGST Act Legal framework (as discussed by the Court): The Court examined Section 129(3) of the CGST/GGST Act as applied in the decision relied upon by it, which requires the proper officer, after issuing notice, to pass an order within the statutorily prescribed period of seven days from the date of service of such notice. Interpretation and reasoning: The Court noted that the issue was 'squarely covered' by the earlier decision it relied upon, and the State could not controvert that position. Applying that interpretation, the Court treated the time prescription in Section 129(3) as mandatory for the validity of the order passed under Section 129. On the facts before it, the notice in Form GST MOV-07 was issued on 10.11.2025, whereas the penalty order in Form GST MOV-09 was passed on 19.11.2025. The Court held that this amounted to passing the order beyond the stipulated seven-day period contemplated by Section 129(3). Conclusions: The Court conclusively held that there was a violation of Section 129(3) because the order dated 19.11.2025 was passed beyond the permissible period reckoned from the notice dated 10.11.2025. The petition was allowed on this sole ground. Issue (ii): Relief and effect of the statutory breach on the detention and penalty proceedings Interpretation and reasoning: Having found the Section 129(3) breach determinative and dispositive, the Court did not proceed to decide any other procedural objections raised. The statutory non-compliance was treated as sufficient to invalidate the impugned detention and penalty action taken under Section 129. Conclusions: The Court quashed and set aside (a) the penalty order in Form GST MOV-09 dated 19.11.2025, (b) the notice in Form GST MOV-07 dated 10.11.2025 issued under Section 129, and (c) the detention order in Form GST MOV-06 dated 09.11.2025 issued under Section 129(1). The rule was made absolute, with no order as to costs.