2024 (9) TMI 1583 - HC - GST

Violation of the provision under Section 129 (3) of the Central Goods and Services Act, 2017 - time limitation - specific contention raised by the petitioner is on Annexure P/2, a circular issued under Section 68 of the C.G.S.T Act read with Rule 138 of the C.G.S.T Rules, 2017 - HELD THAT - It is specifically directed, as per Paragraph No. 2 (g), that an order of detention in FORM GST MOV-06 and a notice in FORM GST MOV-07 has to be in accordance with sub-section (3) of Section 129 of the CGST Act. Here, despite the notice having been issued within time, the petitioner was granted the entire limitation period for filing a reply. The petitioner did file the reply on the last date, in which event the Authority ought to have passed an order on that date itself, after considering the reply. The Authority having delayed the matter, the mandate of Section 129 (3) is not followed. The impugned order cannot be sustained - refund of the amounts paid is directed - petition allowed.

Summary

Issues:
Violation of Section 129(3) of the Central Goods and Services Act, 2017.

Analysis:
The petitioner challenged an order dated 18.04.2024 for violating Section 129(3) of the CGST Act, which requires passing an order within 7 days of notice. The detention notice was served on 30.03.2024, a reply filed on 12.04.2024, and the order passed on 18.04.2024. The petitioner argued that the order should have been passed by 12.04.2024 due to a public holiday on the 11th. The petitioner relied on a Division Bench judgment stating no penalty order can exceed the limitation period under Section 129(3).

The Government Advocate argued that the reply filed on the 12th should be deemed as the date of notice service, citing a different case. It was contended that the petitioner's payment on 24.04.2024 falls under Section 129(5) of the Act. The Court differentiated the current case from the cited cases, emphasizing that the order should have been passed promptly after the reply was filed on the last date to comply with Section 129(3).

The Court highlighted a circular under Section 68 of the CGST Act, directing compliance with Section 129(3). Despite issuing the notice on time, the Authority delayed passing the order after the reply was filed on the last date. The petitioner's payment on 24.04.2024 was considered to be for the vehicle's release and not under Section 129(1)(a) of the Act. The Court concluded that the impugned order was unsustainable, setting it aside and directing a refund of the amounts paid.