TaxTMI 
TaxTMI 
2026 (7) TMI 1769
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.... (iv) Summary of Order issued under Section 129 (3) dated 22nd September 2025 (Annexure IV). 2. The impugned notices, which are purportedly issued under Section 129 of the J&K Goods and Services Tax, 2017 ["Act of 2017"], particularly the Order dated 22nd September 2025, have been assailed by petitioners primarily on the ground that the order dated 22nd September 2025 has been passed by respondent no. 2 after expiry of seven days stipulated in Section 129(3) of the Act of 2017 for passing the order of payment of penalty in terms of clause (a) or clause (b) of Sub-section (1) of Section 129 of the Act. 3. Briefly put, the facts leading to filing of this petition are that on 11th September 2025, vehicle bearing registration no. JK02CS-0580, belonging to petitioners was intercepted at Heerpora, Shopian by respondent no. 2. One, Mohammad Shafi, claiming to be representative of the transporter and owner of goods carried in the vehicle, appeared before respondent no. 2, but failed to provide any document relating to consignment loaded in the vehicle. A show cause notice in terms of Section 129(3) of the Act of 2017 was issued on 11th September 2025, proposing penalty to the tune o....
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..... Indisputably, the notice of show cause for imposing penalty in terms of Section 129 (3) of the Act of 2017 was served upon petitioner on 14th September 2025, on which date the petitioner not only appeared before respondent no. 2 but also filed his reply. Going strictly by provisions of Section 129(3) of the Act of 2017, the final order for payment of penalty was to be passed by respondent no. 2 within a period of seven days from the date of service of such notice. 9. If we take service of notice upon petitioner no.1 on 14th September 2025, the last date by or before which the order for payment of penalty under Section 129(1) of the Act, could have been passed, was 21st September 2025. However, in the instant case, the order imposing penalty was passed on 22nd September 2025, i.e., after expiry of statutory period stipulated under Section 129 (3) of the Act of 2017. 10. It is in the backdrop of aforesaid admitted factual position that the learned counsel for petitioner contends that the notice impugned dated 22nd September 20-25 is not sustainable in law. He places reliance upon the judgement of the Gujarat High Court in the case of Allcargo Logistics Limited through its Dis....
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....the owner of the goods does not come forward for payment of such penalty; (c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed : Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. [***] (3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1). (4) No penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded. (6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fi....
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....or clause (b) of Sub-section (1) of Section 129 of the Act of 2017. 16. From the plain reading of Sub-section (3) of Section 129 of the Act of 2017, it is abundantly clear that the legislature by using the expression "shall" in respect of show cause notice as well as notice for payment of penalty has signified its intent that adherence to timeline is mandatory. Otherwise also, the Act of 2017 is a fiscal statute and, therefore, required to be construed strictly. It is true that Sub-section (3) of Section 129 of the Act of 2017 does not provide for consequence of non-adhering to the timelines but that alone cannot be a determining factor to come to a conclusion that seven days' period stipulated in Sub-section (3) of Section 129, is not mandatory in nature. 17. We are, thus, inclined to concur with a view taken by various High Courts and the High Court of Gujarat that the timelines under Section 123 of the Act are mandatory. This is so primary for the following reasons: (i) The provision regulates exercise of coercive statutory power; (ii) It protects valuable primary rights; (iii) The legislature has prescribed timelines using the word "shall"; ....