Penalty Demand after 7 Days of Detention for Expiry of E-way Bill invalid: Madras HC quashes GST Demand & Detention [Read Order]

A Single Bench of the Madras High Court has quashed the GST demand and detention order holding that the penalty demand after 7 days of detention for expiry of E-way bill would be invalid.

 A Writ petition had been filed by,Deepam Roadways to call for the order of Demand of Penalty  and order of detention and quash the same as being without jurisdiction and authority of law and further direct the respondents to arrange to release the consignment - goods with vehicle. In the writ petition the petitioner had challenged the detention order as well as the consequential order calling upon the petitioner to pay a sum towards CGST and another sum towards SGST as penalty. Both the orders were passed as per the provisions of section 129 of the CGST Act, 2017.

Section 129 of the CGST Act deals with the Detention, seizure and release of goods and conveyances in transit. According to, 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.

R.Senniappan appeared for the petitioner and Venkateswaran, appeared for the respondent.

 A single Bench of JUSTICE ABDUL QUDDHOSE quashed the impugned order and allowed the writ petitions, directing to release the detained goods and conveyances of vehicle. The Bench observed that,

“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 penalty was passed only on 10.11.2022 which is beyond the period of seven days from the date of service of notice on the petitioner. Having passed the impugned order beyond the period of seven days from the date of service of notice on the petitioner which is contrary to section 129(3) of the CGST Act, 2017, the impugned orders have to be necessarily quashed and the writ petitions will have to be allowed.”

To Read the full text of the Order CLICK HERE

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