2026-VIL-52-GSTAT-TVP
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SGST Tribunal

GST - Detention and seizure of goods in transit - Imposition of penalty - Mandatory compliance with statutory timelines under Section 129(3) of CGST Act 2017 - Appellant challenged contending that penalty order passed 47 days after Notice MOV-07, violating the mandatory 7-day period prescribed under Section 129(3) - Whether the 7-day period prescribed in Section 129(3) for passing penalty order is mandatory or merely directory - HELD - Section 129(3) of CGST Act 2017 prescribes that proper officer shall issue notice within seven days of detention or seizure and thereafter pass order within period of seven days from date of service of such notice for payment of penalty. Use of word ‘shall’ indicates legislative intent that adherence to timeline is mandatory. Since GST Act is fiscal statute it must be construed strictly. Absence of express consequences of non-compliance does not render provision directory - Timeline has been introduced to prevent arbitrary detention, prolonged seizure and harassment to trader. Multiple High Courts have consistently held provisions of Section 129(3) to be mandatory and held that failure to adhere to timelines prescribed therein would vitiate order of detention – Further, the facts show appellant had generated tax invoices as e-invoices from portal, filed GST returns and paid appropriate GST, indicating no mens rea to evade tax only because e-way bill was not prepared. First Appellate Authority failed to examine basic fact of dates which was apparent on record - Order MOV-09 issued beyond mandatory time limit of 7 days is illegal and without jurisdiction. First Appellate Authority erred in failing to examine this issue. Order-in-appeal is set aside – The appeal is allowed
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