The Hon’ble High Court of Madras vide its order dated 28.12.2022 in the matter of TVL. Udhayan Steels Private Limited, Rep. By Its Director Selvan Vs. Deputy State Tax Officer (Int.) Roving Squad, Coimbatore, The Assistant Commissioner (ST), Adjudication, Coimbatore, in W.P. No. 34268 of 2022 and W.M.P. No. 33714 & 33715 of 2022, held that the order of detention under Section 129(3) has to be passed within seven days of the notice and therefore, orders passed not following the timelines prescribed are set aside and the vehicle/goods in question were ordered to be released immediately.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the impugned order dated 15.12.2022 and the connected order of detention in Form GST MOV-06 dated 07.12.2022, on the short ground that the impugned proceedings are barred by limitation prescribed under Section 129(3) of the GST Act, 2017.

Petitioner’s submissions: –

• Relying upon the order dated 10.2022 made in W.P. No. 25931 of 2022, it was submitted on the behalf of the petitioner that the Scope of Section 129 of the Act, had come up for consideration before this Court in the said writ petition, and the Hon’ble Court held that it is incumbent upon the authority to pass an order of detention prior to the period stipulated i.e., 7 days under Section 129(3) of the Act.

On the other hand, on the behalf of the respondents’ attention was drawn to the fact that the petitioner had earlier approached this Court in W.P.No.23816 of 2022 challenging show cause notice dated 16.08.2022, and the said writ petition was withdrawn by the petitioner and consequently the petition was dismissed as withdrawn.  Since the petitioner was permitted to file a reply to the show cause notice, the question of delay 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 after considering the submissions, facts of the case and the relevant provisions, found that in the present case neither order of detention nor show cause notice have been issued in time. The date of interception of vehicle is 01.08.2022 and the order of detention has been passed only on 11.08.2022. The show cause notice has been issued on 16.08.2022. The timelines as set out under Section 129 are completely vitiate the proceedings in full.
• Further, there is no merit in the contention raised on the behalf of the respondents, as neither of the parties had argued the position of delay in W.P. No. 23816 of 2022 and the direction to the officer in order dated 09.2022 is to consider the reply of the petitioner ‘in accordance with law’ and thereafter pass an order.
• It was found 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. Thus, it was incumbent upon the authority to have taken note of the same, which has not been done in the present case.
• Thereafter, it was found by the Hon’ble Court that the admitted dates clearly reveal the lapses in adhering to the statutory and stipulated timelines and therefore, the case of the petitioner merits acceptance. Hence, the impugned orders are set aside.
• Lastly, the Hon’ble Court after perusal of relevant dates in the present matter i.e, date of detention (12.2022), notice issued (07.12.2022) and the date of passing the detention order 15.12.2022, found that it has been submitted by both sides that the order of detention under Section 129(3) of the Act, has been passed on the eighth day from the service of notice, whereas the time line stipulated under Section 129(3) of the Act is that the order ought to be passed within a period of 7 days from the date of service of such notice. Thus, the impugned proceedings are beyond the time lines stipulated under Section 129(3) of the Act, the same is fatal to the order in terms of the order of this Court in W.P.No.25931 of 2022.

The Hon’ble Court with the above findings, allowed the writ petition by setting aside the impugned orders as well as the impugned proceedings and ordered for immediate release of vehicle/goods in question.