J&K HC Quashes GST Penalty Despite Mere One-Day Delay Under Section 129(3)

Mohd Hazzak Lohar Vs Commissioner State Tax (Jammu and Kashmir and Ladakh High Court)

The Jammu & Kashmir and Ladakh High Court considered a writ petition challenging Notice in Form GST MOV-02 dated 11 September 2025, Notice in Form GST MOV-06 dated 11 September 2025, Notice in Form GST DRC-01 dated 11 September 2025, and the Summary of Order issued under Section 129(3) of the J&K Goods and Services Tax Act, 2017 dated 22 September 2025. The principal challenge was to the penalty order on the ground that it had been passed after expiry of the seven-day period prescribed under Section 129(3) of the Act.

The vehicle belonging to the petitioners was intercepted on 11 September 2025. A representative appearing before the State Taxes Officer failed to produce documents relating to the consignment, following which a show cause notice under Section 129(3) proposing a penalty of Rs.15,05,746/- was issued on the same day. On 14 September 2025, the petitioner filed a reply, agreed to furnish a bank guarantee under Section 129(1)(c), and sought details of the authority in whose favour it should be executed. Instead of furnishing the guarantee, the petitioner later disputed the valuation of the seized goods and sought revaluation. A revaluation team was constituted on 17 September 2025 and submitted its report after verifying prevailing market rates.