2025-VIL-1149-TRI
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SGST High Court Cases

GST - Seizure and detention of goods, Failure to pass penalty order under Section 129(3) of the CGST Act, 2017, payment of penalty under protest – Detention of goods on the ground of expired e-waybills and mismatch with the vehicle. Despite a physical verification report finding no discrepancies, the authorities issued a detention order and show-cause notice proposing penalty. The petitioner paid the penalty under protest to secure the release of the goods and vehicle. However, the authorities failed to pass a final order justifying the penalty as mandated under the law - Whether the levy and collection of penalty without a final order is valid – HELD - The failure of the authorities to pass a final order under Section 129(3) of the Act, justifying the penalty, despite the petitioner's clear intent to challenge it, violates the statutory mandate and the petitioner's constitutional rights - the payment of penalty was made only to secure release of goods and was under economic duress and the petitioner clearly indicated his wish to challenge the order when passed in appeal. The payment of penalty under economic duress cannot be treated as a voluntary acceptance of liability exonerating the respondents from passing an order as mandated by the later part of sub-section (3) of Section 129 justifying imposition of penalty on the petitioner - The authorities are directed to refund the penalty amount with interest and also pay costs to the petitioner for their non-compliance with the law – The writ petition is allowed
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