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The Patna High Court has quashed the seizure order under section 129 (3) of the GST Act passed after the expiry of 7 days from the date of Notice.
The bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy observed that there was no proceeding to be concluded as on the date of payment, which is on 24.04.2024, since an order was passed on 18.04.2024. The payment was made only to get release of the vehicle, which payment was also as against the orders passed and not under Section 129 (1)(a) of the GST Act.
Background
The petitioner/assessee has challenged the order and the ground raised is of violation of the provision under Section 129 (3) of the Central Goods and Services Act, 2017.
The petitioner submitted that the order has not been passed within 7 days of service of notice. The vehicle which was carrying the petitioner’s goods were detained by the authority on 30.03.2024. A physical verification was conducted on the very same day. A notice was uploaded in the portal. It has the signature of the representative of the petitioner and hence the notice was served within 7 days of detention, which was on 30.03.2024.
The stipulation in Section 129 (3) is that an order should be passed within 7 days from service of notice.
By the notice dated 04.04.2024, the petitioner was given time up to 11.04.2024 to file a reply. The 11th was a public holiday and hence the petitioner filed a reply on 12.04.2024. The order was passed on 18.04.2024 while it had to be passed at least on 12.04.2024 since the 11th was a public holiday.
The petitioner relied on a judgment of the Division Bench in the case of Pawan Carrying Corporation vs Commissioner CGST & Central Excise & Ors in which it was held that no penalty order could have been passed beyond the limitation period under Section 129 (3) of the GST Act.
The department on the other hand argued that if the owner of the goods approached the officer, then the penalty would be imposed under Section 129 (1)(a) leading to release of the goods released and if not, proceedings should be taken under clause (b) of Section 129 (1). The petitioner was given time up to 11th and since the reply was filed on the 12th, the said date should be deemed as the date of service of notice. The petitioner had remitted the amounts on 24.04.2024, which makes applicable on Section 129 (5) of the GST Act.
FAQs
What is the limitation period to pass seizure order under CGST Act?
The Patna High Court in the case of M/s Kedia Enterprises V/S The State of Bihar And Ors. quashed the seizure order under section 129 (3) of the GST Act passed after the expiry of 7 days from the date of Notice.
Which provision seizure order under CGST Act may be passed?
The stipulation in Section 129 (3) of the GST Act is that an order should be passed within 7 days from service of notice.
Conclusion
The court while allowing the petition held that order cannot be sustained and directed the department to refund the amounts paid.
Case Title: M/s Kedia Enterprises V/S The State of Bihar And Ors
Citation: Civil Writ Jurisdiction Case No.11021 of 2024
Counsel for the Petitioner: Anubhav Khowala
Counsel for the Respondent: Vikash Kumar, SC
Date of Decision: 25-09-2024
