The Madras High Court has ordered the release of the vehicle as the department has failed to pass the detention order within the period as provided for under Section 129 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) and no show cause notice has been issued within the period of 7 days as set out under Section 129(3) of the TNGST Act.
The single bench of Justice Anitha Sumanth has observed that since the statutory show cause notice is to be issued within a period of 7 days from the date of interception, it becomes incumbent upon the authorities to pass an order of detention prior thereto.
The petitioner/assessee has challenged an order of detention and an order of demand for tax and penalty passed in terms of the provisions of the Tamil Nadu Goods and Services Tax Act, 2017.
The petitioner had transported a second-hand Tata Hitachi excavator that had been intercepted on August 1, 2022, at 11.20 p.m. at Ammapet Bye Pass junction, Salem. The statement of the driver of the vehicle on Form GST MOV-01 was recorded on the same day. Simultaneously, Form GST MOV-02, being an order of physical verification, was issued along with a report of physical verification on Form GST MOV-04.
The petitioner contended that there was no permission sought and received on Form GST MOV-03 for the extension of the 3 day period for the issuance of the order on Form GST MOV-02. There was no order of detention that was passed within the period as provided for under Section 129 and neither was a show cause notice issued within the period of 7 days as set out under Section 129(3).
The department submitted that 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 the Court. Hence, the order dated 13.09.2022 is perfectly in order.
The court held that the department must follow the scheme of events and timelines stipulated under Section 129, commencing from the interception of a vehicle and passing of the final order of penalty.
“There is no merit in this submission. In fact, neither of the parties had argued the position of delay before me in the earlier round of proceedings and the direction to the officer in the order dated 06.09.2022 was to consider the reply of the petitioner ‘in accordance with law’ and thereafter pass an order,” the court said.
Case Title: A. Irudayaraju Versus The State Tax Officer, Adjudication Cell
Citation: W.P.No.25931 of 2022 and WMP Nos.25014 and 25015 of 2022
Counsel For Petitioner: Advocate R.Senniappan
Counsel For Respondent: Government Advocate V. Prashanth Kiran
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