TaxTMI 
TaxTMI 
2026 (8) TMI 1052
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....ansport vehicle bearing registration No. KL22N0394. The vehicle was intercepted by the Assistant State Tax Officer, Mobile Squad IV, Kollam at Punalur at 03.30 PM. It was observed that the goods were accompanied by two Tax e-Invoices G-168 dated 16.04.2022 for value of Rs. 3,41,952/- and G-169 dated 16.04.2022 for value of Rs. 4,498/-, in favour of their buyers M/s. J.B.S. Automotive, Thadikkad, who was also a registered person holding GSTIN 32AWPPJ2895R1ZL. However, the driver of the vehicle could not produce the e-way bill for the said transport of goods. The goods were therefore detained and a Notice in MOV-07 dated 18-4-2022 was issued to the appellant and a penalty of Rs. 138706/- equal to 100% GST was imposed under Section 129 (1) of the CGST/KGST Act, 2017. The said goods and the conveyance was released on 20-4-2022, on furnishing of Bond and Bank Guarantee valid upto 18-4-2027 for an amount of Rs. 138706. The Summary DRC-01 dated 20-4-2022 was issued after release of goods and the electronic summary in Form GST DRC-01 - Ref No. ZD3204220165040 was uploaded on the GST Portal on 20.04.2022. However, the Order in Form GST MOV-09 was passed on 04.06.2022, confirming the Penalty....
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....s Ltd vs State of Gujarat. 4.0 The Ld Joint Commissioner, appearing as Authorised Representative on behalf of the Commissioner of State Tax, Kerala, submits that the Appellant's first appeal (GSTA No. 81/2022) was confined only to two contentions: (i) that the lapse was clerical/ technical in nature, relying on Satyam Shivam Papers and Hindustan Steel Ltd; and (ii) that the adjudicating officer and the investigating officer being the same person violated natural justice. He submits that the they had never raised the ground of limitation under Section 129(3) of the CGST / KGST Act, 2017, even though the dates now relied upon i.e. the MOV-07 dated 18.04.2022 and MOV-09 dated 04.06.2022 were always available to the Appellant. They are raising this ground for the first time before the Hon'ble Tribunal regarding limitation and jurisdiction. He also submits that a ground that was available but consciously not taken cannot ordinarily be permitted to be raised for the first time at a further appellate stage, particularly where the ground is not a pure question of law but requires an assessment of facts and consequences and the delay in passing the Order MOV-09 u....
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....ports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,-- (a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty; (b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where 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 s....
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...., on payment of an amount equal to two percent of the value of goods or Rs. 25,000/- whichever is less, where owner of the goods comes forward for payment of such penalty. However, where the owner of goods does not come forward for payment of penalty, he shall be liable to pay penalty equal to fifty percent of the value of goods or two hundred percent of the tax payable on such goods whichever is higher, and in case of exempted goods, on payment of an amount equal to five percent of the value of goods or Rs. 25,000/- whichever is less and it is only payment of such penalty that the goods, conveyance or the documents as the case may be shall be released. 5.4 We find that the Sub-section 3 of Section 129 supra, which is relevant for the purpose of our discussion, lays down that the proper officer, who detains or seizes 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 form the date of service of such notice for payment under clause (a) or clause (b) of Sub-section (1) of Section 129 of the CGST / KGST Act, 2017. From the plain reading of Sub-section (3....
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....he aforesaid intention that the legislature has used the expression "shall" at two places in Section 129(3) of the Act. 20. The view, which we have taken on the interpretation of Section 129(3) finds support from the judgements rendered on the point by various High Courts. The High Court of Gujarat in Allcargo Logistics Limited (supra) and couple of other judgements, has held the provisions of Section 129(3) mandatory and held that failure to adhere to the timelines prescribed therein would vitiate order of detention. 21. We are aware that in the instant case there is only delay of one day in passing the order of penalty by respondent no. 2 and that there were some intervening circumstances contributing to such delay, yet in view of the clear provisions of Section 129(3) of the Act, respondent no. 2 was under an obligation to pass the order of payment of penalty within a period of seven days from the date of service of show cause notice of proposed penalty and this the respondent no. 2 could have done with respect to the goods other than the banned contraband, i.e., polythene. 22. In view of the aforesaid, we are left with no option but to accept this pet....
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....1) of Section 129 of the GST Act. xxx xxx xxx 15. In view of the above dictum of law, we are in respectful agreement with the above proposition of law laid down by various High Courts and when the respondent authority has failed to issue notice as required under sub-section (3) of Section 129 of the GST Act, the detention order dated 6.5.2025 is liable to be quashed and set-aside. 6.4 In the case of Deepam Roadways vs Deputy State Tax Officer, Chennai, cited in (2023) 3 Centax 37 (Mad.) it is held that: 4. As seen from section 129(3) of the Central Goods and Services Tax Act, 2017, the proper officer after detaining the goods or conveyance shall issue a notice 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) of section 129. 5. In the instant case, after detaining the petitioner's vehicle and the goods on 26.10.2022, notice was issued by the respondents on 31.10.2022 within seven days from the date of detention. However, the consequential order for payment of....
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....hall issue 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)" (underlining by us for emphasis) 9. The Limitation is clear and definite. The facts of the case indicate that the officers did not act in accordance with the provisions, we hence find no reason to sustain the demand raised. We set aside the orders passed for detention of the vehicles. The vehicle with the goods would be released immediately. Ordered, accordingly. 10. The petition is allowed. 6.6 In the case of K.P. Sugandh Ltd vs Chief Commissioner of CT & GST, Odisha cited in (2025) 26 Centax 62 (Ori.) it was held that 4. Sub-section (3) in section 129 provides for a specific period of seven days for passing of an order. The seven days is to be reckoned from date of service of the notice, specifying the penalty payable. Issuance and receipt of the penalty notice is not in dispute. For us to take a view that mere passing of the order within the time prescribed is sufficient for compli....