Khanna Engineering Vs Commissioner of CT & GST (Orissa High Court)
Orissa High Court has dismissed a writ petition filed by Khanna Engineering, ruling that the voluntary payment of a penalty under Section 129 of the Goods and Services Tax (GST) Act concludes all associated proceedings. The court held that once the penalty amount is paid, the legal process concerning the detention of goods is deemed finalized by operation of law, irrespective of subsequent challenges to the detention’s legality or the absence of a formal order within the statutory timeframe.
The case originated on July 5, 2024, when a truck carrying a consignment for Khanna Engineering was detained. A penalty of ₹5,37,656 was calculated under Section 129(1)(a) of the Odisha Goods and Service Tax Act, 2017. According to the petitioner, facing urgency to release the consignment, they paid the calculated penalty on the same day the truck was detained.
However, Khanna Engineering later filed a petition on September 4, 2024, seeking a formal order in Form GST MOV-09. The petitioner argued that the initial detention was illegal and, crucially, that no formal order under Section 129(3) of the Act had been passed within the stipulated period of seven days from the service of notice. Their petition seeking such an order was subsequently rejected by the tax authorities on September 26, 2024, a decision the petitioner challenged before the High Court.
