Tiger Steels Vs Commissioner of State Tax (GSTAT Ernakulam)
Summary : The GSTAT, Ernakulam, allowed the appeal of Tiger Steels against an appellate order confirming proceedings arising from the detention of a consignment of sponge iron. The appellant, a dealer in iron and steel, had sold 30.940 tons of sponge iron to M/s M. A. Steels Pvt. Ltd., Kanjikode, Palakkad. The vehicle was intercepted on 28 June 2019 because the accompanying eway bill had expired on 25 June 2019. The officer demanded Rs. 2,26,108 towards SGST, CGST and penalty. The goods and vehicle were released against a bank guarantee. When the officer subsequently sought to invoke the guarantee without communicating the adjudication order, the appellant approached the Kerala High Court. Following the High Court’s directions, the adjudication order was communicated on 6 August 2019. The first appellate authority dismissed the statutory appeal.
Before examining the merits, the Tribunal considered the chronology of detention, notice and adjudication. The detention order in Form GST MOV-06 and notice in Form GST MOV-07 were issued on 28 June 2019, whereas the order under Section 129(3) was passed on 26 July 2019. Applying the provision reproduced in its order, the Tribunal held that the proper officer was mandatorily required to pass the penalty order within seven days from service of the notice. It found that the order had instead been issued 28 days after issuance of the notice and held it void ab initio and a nullity for violation of the statutory time limit.
