GMG Electric Vs Commissioner of State Tax (GSTAT Ernakulam)
Summary : The GSTAT, Ernakulam, allowed the appeal of GMG Electric against the appellate order sustaining a demand of tax and penalty arising from the transportation of goods with expired e-way bills. The appellant, a registered trader in electrical line materials, safety products and hardware, supplied V Cross Arm Clamps and LT Stay wire to electricity department officials. According to the brief facts recorded in the order, the vehicle was intercepted at Thrissur on 16 August 2021, and verification revealed that the e-way bills had expired on 15 August 2021. The vehicle was detained and subsequently released against a bank guarantee. A demand order under Section 129(3) of the KGST/CGST Act was passed on 4 November 2022, and the first appellate authority rejected the appellant’s challenge.
The Tribunal examined the chronology before considering the merits of the detention. Referring to Section 129(3), as reproduced in its order, it held that the proper officer was mandatorily required to pass the penalty order within seven days from service of the notice. The notice was issued on 16 August 2021, whereas the demand order was passed on 4 November 2022, which the Tribunal recorded as 445 days after issuance of the notice. It consequently held the original order void ab initio and a nullity. The Tribunal relied on Siddhivinayak Automobiles vs Commissioner of Kerala State GST, where the statutory expression “shall” was treated as requiring mandatory adherence to the prescribed timelines.
