Allcargo Logistics Limited Vs State of Gujarat & Ors. (Gujarat High Court)
The Gujarat High Court heard a writ petition challenging the order in Form GST MOV-09 dated 19.11.2025, the notice in Form GST MOV-07 dated 10.11.2025 issued under Section 129(3) of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017, and the detention order in Form GST MOV-06 dated 09.11.2025 issued under Section 129(1). The petitioner also challenged the detention of goods and the conveyance on the ground that the action was beyond limitation, without jurisdiction, and contrary to Section 129(3) of the CGST Act.
The Court noted that, at an earlier hearing, it had recorded the petitioner’s submission that the issue was squarely covered by the decision in Khatu Enterprises vs. State of Gujarat. At the final hearing, the learned Assistant Government Pleader was unable to dispute that the issue was governed by that decision.
The petitioner stated that while transporting a consignment from Ranpur to Changodar, the vehicle was intercepted on 05.11.2025 at about 7:30 p.m. The authorities issued GST MOV-01 and GST MOV-02 alleging that the consignment was covered by 55 E-Way Bills mentioning vehicle No. GJ13AW9143, whereas the goods were actually being transported in vehicle No. GJ01CT4597.
According to the petitioner, immediately after becoming aware of the clerical error in the vehicle number, at 7:47 p.m. on the same day it generated a consolidated E-Way Bill showing the correct vehicle number and produced it before the detaining officer.
The petitioner further submitted that on 10.11.2025 it filed a detailed reply explaining that it was only the transporter and not the owner of the goods, and that the incorrect vehicle number in the E-Way Bills resulted from two vehicles being loaded simultaneously. It was also contended that although a notice in Form GST MOV-07 dated 10.11.2025 was issued under Section 129(3), it was not served through any mode and was handed over only when the petitioner visited the department.
Thereafter, on 19.11.2025, the Proper Officer passed an order in Form GST MOV-09 alleging that, during interception, all 55 E-Way Bills mentioned a different vehicle number and that no valid E-Way Bill existed for the vehicle actually transporting the goods. By the order dated 19.11.2025, the respondent held that there was a violation of Section 68 of the CGST Act read with Rule 138A of the GST Rules, 2017 and confirmed tax and penalty under Section 129.
The petitioner also contended that the mandatory summary of show cause notice in Form DRC-01 was not issued along with Form GST MOV-07, the summary order in Form DRC-07 was not issued along with Form GST MOV-09, and no such documents were uploaded on the GST portal or otherwise communicated, contrary to Rule 142 of the CGST Rules, 2017.
The High Court referred to the decision in Khatu Enterprises vs. State of Gujarat, wherein it was held that under Section 129(3), the proper officer must issue notice within seven days of detention or seizure and thereafter pass an order within seven days from the date of service of such notice.
Applying the same principle, the Court observed that, in the present case, the notice in Form GST MOV-07 was issued on 10.11.2025 whereas the order in Form GST MOV-09 was passed on 19.11.2025, beyond the statutory period of seven days prescribed under Section 129(3). The Court held that the petition succeeded on this sole ground.
Accordingly, the High Court quashed and set aside the order in Form GST MOV-09 dated 19.11.2025, the notice in Form GST MOV-07 dated 10.11.2025 issued under Section 129, and the detention order in Form GST MOV-06 dated 09.11.2025 issued under Section 129(1) of the CGST/GGST Acts. The Rule was made absolute with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Rule returnable forthwith. Learned Assistant Government Pleader Ms. Shrunjal Shah waives service of notice of rule.
2. While passing the order dated 11.12.2025, we had recorded the submissions advanced by learned advocate Mr. Avinash Poddar for the petitioner that the issue raised in the present petition is squarely covered by the decision in case of Khatu Enterprises vs. State of Gujarat, reported in [2025] 180 com 247.(Gujarat).
3. Today, when the matter is taken up for hearing, learned Assistant Government Pleader is unable to controvert that the issue is squarely covered in the said judgment.
4. The Petitioner has filed the present writ petition under Article 226 of the Constitution of India, 1950 is challenging to quash and set aside the order in Form MOV-09 dated 19.11.2025 and notice in Form MOV-07 dated 10.11.2025 under section 129(3) of Central Goods and Service Tax / Gujarat Goods and Service Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’ /‘GGST Act’ respectively), and order of detention in Form MOV-06 dated 09.11.2025 under section 129(1) of the CGST/GGST Act, 2017 and further challenging the action of the Respondent no. 3 detaining the goods & conveyance under section 129 of the ‘CGST Act’ and the ‘GGST Act’, 2017 on the ground that the said action under challenge was undertaken by the respondent No. 3 is beyond limitation and without jurisdiction and in violation of Section 129(3) of the CGST Act, 2017.
5. The petitioner states that while the consignment was being taken and transported from Ranpur to Changodar, the vehicle was intercepted on 05.11.2025 at 07.30 PM by Respondent Number 03 at Bhamasara Bridge, Ahmedabad Bagodara Highway. Pursuant to the interception, the respondent authority issued GST MOV 01 dated 05.11.2025 and GST MOV 02 dated 05.11.2025 alleging that multiple E-Way Bills, i.e. 55 accompanied the consignment. It was further observed by the respondents that the vehicle number mentioned on each of the E-Way Bills was GJ13AW9143, whereas the goods were in fact being transported in vehicle No. GJ01CT4597.
6. The petitioner states that after interception at around 07:30 p.m. on the same day, the petitioner became aware of the clerical error regarding the incorrect vehicle number in the E-Way bill. Immediately thereafter, at 07:47 p.m. on the same day, the petitioner generated a consolidated E-way bill reflecting the correct vehicle number GJ01CT4597 and duly produced the same before the detaining officer.
7. That on 10.11.2025 a detailed reply was submitted to the respondent authority explaining that petitioner is only the transporter and not the owner of the consignment, and that the interception occurred only because the vehicle number in the E-Way Bills was wrongly entered due to two vehicles being loaded at the same time
8. Thereafter, it appears that the respondent No.3 issued a Notice in Form GST MOV-07 under Section 129(3) of the GST Act on the same day. It was not received by the petitioner through any mode. It appears that the petitioner visited department and notice was handed over to him.
9. After issuance of the detention notice in Form MOV-07 dated 10.11.2025, and even after expiry of the statutory seven days granted therein section 129(3) of the CGST/ GGST Act, on 19.11.2025 the Proper Officer proceeded to pass Form MOV-09 Order alleging that during interception of vehicle GJ01CT4597 on 05.11.2025, 55 E-Way Bills were produced, all mentioning vehicle No. GJ13AW9143, and no valid E-Way Bill existed for the actual vehicle, leading to detention of the goods and conveyance.
10. Thereafter, an order dated 19.11.2025 was issued by the respondent authority. It is the case of the petitioner that the said order was handed over to the petitioner when he visited the respondent authority. By the said order dated 19.11.2025, the respondent held that there was violation of provisions of Section 68 of the CGST Act read with Rule 138A of the GST Rules, 2017 and thereby confirmed the tax and penalty under Section 129 of the GST Act.
11. Learned Advocate Mr.Poddar appearing for the the petitioner has submitted that the respondent authority did not issue the mandatory Summary of Show Cause Notice in Form DRC 01 along with the MOV 07 notice, nor was the Summary of Order in Form DRC 07 issued along with the MOV 09 order, and no such documents were uploaded on the GSTN portal or communicated to the petitioner by any mode, which is contrary to the procedure prescribed under Rule 142 of the CGST Rules, 2017.
12. It is contended that, the impugned order dated 19.11.2025 was passed in gross violation of the mandatory requirement under Section 129(3) of the GST Act, which mandates that the proper officer pass the order within seven clear days from the issuance of notice. In the present case, the notice in Form GST MOV-07 was issued on 10.11.2025, but the order was passed on 19.11.2025, thereby violating the principles of natural justice and rendering the order illegal, arbitrary, and without jurisdiction.
13. At this stage, we may refer to the decision of Coordinate Bench in the case of Khatu Enterprises vs. State of Gujarat (supra) wherein the Coordinate Bench has held thus:
“11. Having heard learned advocates for the respective parties and having considered the facts of the case, it would be germane to refer to provisions of Section 129(3), which reads as under:
“129(3): The proper officer detaining or seizing goods or conveyances shall issue 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. On perusal of the above provision, it is incumbent upon the respondent authority after detaining or seizing of the goods or conveyance, to issue a notice within 7 days from such detention or seizure, specifying the penalty payable and pass an order within a period of 7 days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1)of Section 129 of the GST Act.
xxx xxx xxx
15. In view of the above dictum of law, we are in respectful agreement with the above proposition of law laid down by various High Courts and when the respondent authority has failed to issue notice as required under sub-section (3) of Section 129 of the GST Act, the detention order dated 6.5.2025 is liable to be quashed and set-aside.
16. In view of the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned order of detention of goods and vehicle dated 6.5.2025 issued in Form GST MOV-06 is hereby quashed and set-aside, in view of the provisions of Section 129(3) of the GST Act, and the respondent authorities are directed to release the goods in question and the conveyance bearing number RJ-14GN-6007 and RJ-14GN-6017 forthwith.
16.1 We, however, make it clear that the petitioner is required to reply to the notice issued in Form GST MOV-10 dated 6.8.2025 by the respondent No.3, if not filed within a period of 15 days from the date of receipt of a copy of this Order along with an undertaking to pay the fine in lieu of confiscation of the goods and conveyance if any order under Section 130 of the GST Act is passed against the petitioner by the respondent authority, after giving an opportunity of hearing to the petitioner.”
14. Thus, in the present case, there is violation of provisions of Section 129(3) of the CGST Act as the order dated 19.11.2025 has been passed beyond the period of 7 (seven) days from the date of service of notice. In present case, the notice in Form GST MOV-07 was issued on 10.11.2025 and the order dated 19.11.2025 and hence the present petition succeeds only on this sole ground. The impugned order in Form GST MOV-09 dated 19.11.2025, notice in Form GST MOV-07 dated 10.11.2025 under section 129 of the CGST/GGST Act, 2017 and order of detention in Form GST MOV-06 dated 09.11.2025 under section 129(1) of the CGST/GGST Act, 2017 are quashed and set aside. Rule is made absolute. No order as to cost.
