Case Law Details
Tvl.V.V.Iron and Steels Vs State Tax Officer (Madras High Court)
Introduction: The Madras High Court recently addressed a crucial case involving Tvl.V.V.Iron and Steels challenging a notice issued under Section 129(3) of the CGST Act, 2017. The petitioner contested the timing of the notice, raising questions about adherence to statutory limitations.
Detailed Analysis: The petitioner argued that the notice (Form GST Mov-07) dated 05.09.2023, issued in response to the interception of goods/conveyance on 30.08.2023, violated the seven-day limitation prescribed by Section 129(3). The petitioner received the notice on 08.09.2023, beyond the stipulated timeframe.
The court considered the respondent’s claim that the notice was dispatched via e-mail on 07.09.2023, and simultaneously affixed to the vehicle. However, the petitioner contended that the notice had to be served within seven days from the date of detention or seizure, which should be calculated from the intended seizure date, not the following date.
Section 129(3) of the TNGST Act, 2017, was pivotal in the court’s decision. It explicitly mandates the issuance of a notice within seven days of detention or seizure, specifying the penalty payable. The court emphasized the clear language of the section, underscoring that the seven-day period starts from the intended seizure date, not the subsequent day.
The court concluded that the impugned notice, dispatched via e-mail on 07.09.2023, after the expiry of the seven-day limitation, was invalid. Consequently, the court quashed the notice and directed the respondent to release the goods/conveyances. However, the respondent retained the liberty to impose penalties under other provisions of the Act, provided due process was followed.
Conclusion: In a significant ruling, the Madras High Court declared the notice issued to Tvl.V.V.Iron and Steels as invalid due to a timing violation under Section 129(3) of the TNGST Act, 2017. The decision underscores the importance of adhering to statutory timelines in the issuance of notices related to detention or seizure of goods/conveyances. The petitioner secured a favorable outcome with the quashing of the impugned notice, while the respondent retains the option to impose penalties through proper procedures.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mr. C. Harsharaj, learned Additional Government Pleader takes notice on behalf of the respondent.
2. The petitioner has challenged the impugned notice in Form GST Mov-07 dated 05.09.2023.
3. The specific case of the petitioner is that the impugned notice in Form GST Mov-07 has been issued beyond the period of limitation prescribed under Section 129(3) of the Central Goods and Services Tax (CGST) Act, 2017.
4. It is submitted that the goods/conveyance were intercepted on 30.08.2023 and thereafter, tz`he statements were recorded and order for physical verification/inspection of goods/conveyance and documents were issued in Form GST Mov-02 on the same date i.e., on 30.08.2023.
5. It is further submitted that the notice was received by the petitioner on 08.09.2023 beyond the statutory period of limitation under the aforesaid provision.
6. It is therefore submitted that the impugned notice has to lapse in view of limitation prescribed under Section 129(3) of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017.
7. The learned Additional Government Pleader for the respondent on the other hand would submit that the notice was dispatched to the petitioner through e-mail at about 5.54 p.m. on 07.09.2023.
8. It is further submitted that on the same date i.e., on 07.09.2023, the notice was also affixed on the vehicle.
9. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.
10. The impugned notice ought to have been issued to the petitioner within seven days on the date of detention/seizure of goods/conveyance as is contemplated under Section 129(3) of the TNGST Act, 2017.
11. Sub-Section 3 to Section 129(3) of the TNGST Act, 2017 reads as under:-
“129. Detention, Seizure and Release of goods and conveyances in transit:
(1) …..
(2) …..
(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).”
12. Section 129(3) of the TNGST Act, 2017 has not used the expression “within seven days from the date of detention or seizure”. The language in Section 129(3) of the TNGST Act, 2017 is clear. Notice specifying payment of penalty has to be issued within seven days of detention or seizure of goods. Issuance of notice within seven days has to be calculated from the date on which seizure was to be effected and not from the following date. Thus, the last date for issuance of the impugned notice would have expired on 06.09.2023. However, the impugned notice has been dispatched through e-mail only on the following date i.e., on 07.09.2023 after the expiry of limitation.
13. Therefore, on this ground alone, the impugned notice has to go. Consequently, the impugned notice stands quashed with a direction to the respondent to release the goods/conveyances of the petitioner, if they have not been released so far. However, liberty is given to the respondent to impose penalty under any other provisions of the Act, after complying with the same.
14. In the result, this Writ Petition stands allowed. No costs.
