2026-VIL-99-GSTAT-ERN
  1. Home
  2. 2026-VIL-99-GSTAT-ERN

SGST Tribunal

GST - Penalty under Section 129 of CGST Act, 2017 - Detention and seizure of goods in transit as stock transfer - Timeline for passing order - Mandatory compliance with seven-day period - The appellant generated an invoice and e-way bill on 30-7-2020. On 31-7-2020, a vehicle was intercepted at a different location with goods of different variety and value. An order of detention was passed and notice in Form MOV-07 was issued on 4-8-2020 proposing tax and penalty under Section 129(3). However, an order in form MOV-09 imposing penalty was passed on 22-3-2021, which is 230 days after the notice, exceeding the mandatory seven-day period prescribed in Section 129(3) of the Act - Whether the timelines prescribed in Section 129(3) of the CGST Act for issuing notice and passing order are mandatory in nature – HELD - The timelines specified in Section 129(3) are mandatory and not directory. The word "shall" used in the provision indicates the mandatory nature of the timeline. The legislature has prescribed these timelines with the legislative intent of preventing arbitrary detention, prolonged seizure and harassment of traders - Various High Courts have consistently held that failure to adhere to the seven-day timeline vitiates the order of detention and penalty. The provision regulates exercise of coercive statutory power which affects valuable primary rights of the citizen - Even where intervening circumstances exist, the statutory timeline cannot be extended. The order passed beyond the prescribed seven-day period lacks jurisdiction and is illegal – Further there’re is no mens rea on the part of the appellant to evade the tax payment only because e-way bill was not prepared, along with delivery challan for stock transfer. The first appellate authority failed to examine this basic fact which was apparent on the record – The impugned order-in-appeal is set aside, and the respondent is directed to release the bank guarantee to the appellant forthwith – The appeal is allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?