The Hon’ble High Court of Madras vide its order dated 10^th of October 2022 in the matter of A. Irudayaraju Vs. The State Tax Officer, Salem in W.P.No.25931 of 2022 and WMP Nos.25014 and 25015 of 2022, set aside the orders passed for detaining the goods and vehicle of the assessee, for the reason that the said orders were not passed within the prescribed timelines under Section 129.

The petitioner filed the writ petition before the Hon’ble High Court challenging the order of detention dated 11.08.2022 as well as the order dated 13.09.2022 raising the demand of tax and penalty passed in terms of the provisions of the Tamil Nadu Goods and Services Tax Act, 2017.

Facts of the Case: –

• The Petitioner had transported a second-hand Tata Hitachi Excavator that had been intercepted on 01.08.2022 at 11.20 p.m. at Ammapet Bye Pass junction, Salem. Thereupon, the statement of driver in FORM GST MOV-01 was recorded on the same day.
• Simultaneously, an order of physical verification dated 01.08.2022 was issued in FORM GST MOV – 02 along with report of physical verification in FORM GST MOV – 04.

Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that there was no permission received in FORM GST MOV – 03 for the extension of 3 days for issuance of order in FORM GST MOV – 02.
• Further in the instant case, neither any show cause notice was issued within 7 days as prescribed under Section 129(3) of the Act nor any order of detention was passed within the time limit prescribed under Section 129.

On the other hand, it was submitted on the behalf of the respondent that the petitioner had earlier approached this Court in W.P.No.23816 of 2022 challenging show cause notice dated 16.08.2022.  However, the said case was later on withdrawn by the petitioner and liberty was granted to the petitioner by this Hon’ble Court vide order dated 06.09.2022 to file a reply to the show cause notice.  Therefore, the question of delay was already had already been taken note of and condoned by this Court and hence, order dated 13.09.2022 impugned in this Writ Petition is perfectly in order.

Held: –

• The Hon’ble Court considering the submissions made and facts of the case, found that this court in W.P.No.22646 of 2022 in the case of K. Enterprises V. The Assistant/Deputy Commissioner and another, order dated 29.08.2022 set out the scheme of events and timelines stipulated under Section 129 of the Act commencing from interception of vehicle up to passing of final order of penalty. Since the statutory show cause notice is to be issued within a period of 7 days from date of interception, it becomes incumbent upon an authority to pass an order of detention prior thereto.
• Further, there is no merit in the submissions made on the behalf of the respondent as neither of the parties had argued the position of delay before this Court in the earlier round of proceedings and the direction to the officer in order dated 06.09.2022 is to consider the reply of the petitioner ‘in accordance with law’ and thereafter pass an order.
• Thereafter, the Hon’ble Court after taking note of the fact that ‘The petitioner in its reply filed on the same day has specifically made reference to the order in this case of K. Enterprises (supra) and has also referred to the statutory timeline under Section 129 of the Act’, held that it was incumbent upon the authority to have taken note of the same, but the same has not been done in the instant matter.
• Lastly, it was held by the Hon’ble Court that from all the aforesaid reasons, the admitted dates clearly reveal the lapses in adhering to the statutory and stipulated timelines, the case of the petitioner merits acceptance.

The Hon’ble Court with the above findings, allowed the writ petition by setting aside the impugned orders, with the directions to release the vehicle in question forthwith.