GST Demand for Tax & Penalty Quashed: Issued Beyond 7-Day Section 129 Notice Period

S.A. Sugandh Private Limited Vs Chief Commissioner of CT & GST (Orissa High Court)

In the case of S.A. Sugandh Private Limited vs. Chief Commissioner of CT & GST, the petitioner challenged the demand of tax and penalty issued by the authorities. The impugned demand, dated 11th September 2024, was preceded by a detention order dated 30th August 2024, and the notice was issued the following day, 31st August 2024. The petitioner’s senior advocate referred to a previous judgment (W.P. (C) no. 21541 of 2024), where the court had ruled that a demand issued beyond seven days from the date of the notice is impermissible. In this case, the demand was made well beyond the prescribed seven-day limit, and hence, the petitioner sought the quashing of the demand.

The revenue’s counsel presented a “datewise movement of the detained vehicle,” but the court observed that the timeline of issuing the demand clearly violated Section 129 of the Odisha Goods and Services Tax Act, 2017, which mandates that the demand should be made within seven days from the issuance of the notice. In light of this, the Orissa High Court ruled in favor of the petitioner, setting aside the GST demand and penalty. The writ petition was allowed and disposed of accordingly. This judgment reinforces the importance of adhering to legal timelines for issuing demands under GST law.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. Mr. Kar, learned senior advocate appears on behalf of petitioner and submits, impugned is order of demand of tax and penalty dated 11^th September, 2024. He demonstrates from disclosures in the petition, detention order is dated 30^th August, 2024 and the notice issued, next day (31^st August, 2024). Relying on our view expressed in judgment dated 3^rd September, 2024 on W.P. (C) no.21541 of 2024 (RSL Overseas LLP, Kolkata and another v. State of Odisha and others), paragraph-7 he submits, impugned demand was issued more than seven days from the date of notice. He seeks interference for setting aside impugned demand.

2. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and hands up ‘datewise movement of detained vehicle’ as his instruction dated 18^th November, 2024.

3. We do not see there can be dispute on time taken for issuing impugned demand of tax and penalty. The notice is dated 31^st August, 2024 and impugned demand followed on 11^th September, 2024. Clearly, it was made out of time prescribe in section 129, Odisha Goods and Services Tax Act, 2017.

4. Impugned demand is set aside and quashed. The writ petition is allowed and disposed of.