2024 (3) TMI 1162 - HC - GST

Time Limitation - issuing a notice after the detention and then in passing the final order from the date of service of such notice - two figures in the vehicle number differing from that recorded in the e-way bills - HELD THAT - Annexure-P/1 is series of e-way bills which shows the transport to be in vehicle no. UP78 CT 9645. On detention the transport was found to be made in a vehicle having no. UP78 CT 9650. The petitioner produced documents, as stated in the writ petition, establishing that the vehicles bearing both the registration numbers belonged to the petitioner. The tax authority in the order passed specifically pointed out that this would further the case of evasion and if the vehicles were with two different operators probably the recording of the number in the e-way bill was a bonafide mistake - the merits of the case need no consideration, especially when the contention is of bar by virtue of limitation. Be that as it may, even if the detention is stated to be on 28.12.2023, the notice was only issued on 05.1.2024, after the seven day period provided in Section 129(3) CGST Act. Likewise when the petitioner had been informed at the time of verification, if the petitioner had sought for time on the seventh day from the date of serving of notice, there was nothing preventing the tax authority from rejecting the said prayer and passing the order, especially since, if the matter is kept pending, the proceedings would be barred by limitation. The Limitation is clear and definite. The facts of the case indicate that the officers did not act in accordance with the provisions, we hence find no reason to sustain the demand raised. We set aside the orders passed for detention of the vehicles. The vehicle with the goods would be released immediately. Ordered, accordingly. Petition allowed.

Summary

Issues:
The judgment involves issues related to the detention and order passed under section 129(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) based on the grounds of limitation.

Detention and Notice Period:
The petitioner, a carrier transporting tobacco, had their vehicle intercepted on 22.12.2023, but the detention order was issued on 28.12.2023, and the notice under section 129(3) of the CGST Act was served on 05.01.2024, beyond the seven-day period prescribed by the Act. The subsequent order passed on 15.01.2024 was also beyond the stipulated time frame. The petitioner argued that the delay in detention and notice issuance violated the statutory provisions.

Contentions of Petitioner and State:
The petitioner's counsel highlighted the delay in detention and notice issuance, citing a circular directing to ignore negligible defects. On the other hand, the State's counsel stated that the detention occurred after the driver's application for physical verification on 28.12.2023, leading to the notice being issued on 05.01.2024. The State justified the timeline of events leading to the detention and subsequent proceedings.

Non-Obstante Clause and Vehicle Discrepancy:
The judgment noted that the vehicle was intercepted on 22.12.2023, and there was no justification for delaying the verification of goods until the driver's application. Section 129 empowers detention or seizure of goods in transit contravening CGST Act provisions. The discrepancy in vehicle numbers recorded in e-way bills and actual transport was addressed, considering a circular allowing for errors in vehicle number digits.

Legal Provisions and Conclusion:
The judgment cited Section 129(3) of the CGST Act, emphasizing the clear limitation period for issuing notice and passing orders post-detention. As the officers did not adhere to these provisions, the demand was deemed unsustainable, leading to the orders for vehicle detention being set aside, and immediate release of the vehicle with goods was ordered. Ultimately, the petition was allowed, favoring the petitioner's arguments.