Facts of the Case: The petitioner filed a writ petition challenging the detention and penalty orders issued by the Assistant Commissioner, State Tax, Mobile Squad-I, Lucknow under Section 129 of the CGST/UPGST Act, 2017.

The goods were intercepted and detained during transit, and penalties were imposed. The grievance was that no show cause notice (MOV-07) was served on the owner of the goods before passing the penalty order (MOV-09).

The Petitioner argued mandatory requirement under Section 129(3) for issuance of notice and opportunity of hearing was not complied with. Detention and penalty orders passed without notice are void ab initio and violative of natural justice.

During hearing, the Court noted inconsistencies in the officer’s instructions that initially claimed notices were issued to the consignor/consignee. Later admitted that the officer presumed the driver or transporter would inform the owner. The officer appeared in person and revealed lack of proper knowledge of the GST provisions, stating that he was recently promoted and untrained.

Issue: Whether detention and penalty orders under Section 129 are sustainable when no notice is served to the owner of the goods as required by Section 129(3) of the CGST/UPGST Act?

Held that:

The Court held that Section 129(3) mandates issuance of a notice to the owner or transporter specifying the tax and penalty and giving an opportunity of hearing before passing an order. Non-service of such notice amounts to a clear violation of statutory provisions and principles of natural justice.

Presumption that the driver or transporter would intimate the owner cannot substitute the mandatory requirement of notice.

The impugned order in MOV-09 penalty orders were quashed. The directions issued fresh notice to be issued to the petitioner within one week via registered post, SMS, and email. Opportunity of hearing to be provided before passing any fresh order. Also, the Commissioner to send the officer for mandatory training for three months to ensure familiarity with GST laws.

Case Name: M/s Mlv Constructions Thru. Authorized Signatory Versus State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax Govt. Of U.P. Lko. And Another dated 21.08.2025

To read complete judgement 2025 Taxo.online 2036