M/S Kedia Enterprises vs. The State Of Bihar

Held

The Court held that the impugned order cannot be sustained due to a violation of Section 129(3) of the CGST Act, 2017. The Court distinguished the case of M/s Sangam Wires, noting it involved a violation of natural justice where notice and order were passed on the same day. The Court found the situation in Pawan Carrying Corporation, where the order was delayed, to be more analogous. The Court observed that while the notice was issued within time, the petitioner was granted the entire period for filing a reply, and the reply was filed on the last permissible date. The authority ought to have passed an order on that date itself. By delaying the matter, the mandate of Section 129(3) was not followed. Regarding Section 129(5), the Court noted that no proceedings were concluded by the date of payment (24.04.2024) as the order was already passed on 18.04.2024. The Court reasoned that the payment was made solely for the release of the vehicle against the passed order, not under Section 129(1)(a). Consequently, the impugned order was set aside, and a refund of the amounts paid was directed.

Facts

The petitioner, M/s Kedia Enterprises, challenges an order dated 18.04.2024, alleging violation of Section 129(3) of the Central Goods and Services Act, 2017. The petitioner's goods, transported in a detained vehicle, were subject to physical verification on 30.03.2024. A notice was uploaded on the portal on 04.04.2024, which the petitioner acknowledges as service within 7 days of detention. The notice granted time to reply until 11.04.2024. As 11.04.2024 was a public holiday, the petitioner filed a reply on 12.04.2024. The impugned order was passed on 18.04.2024, which the petitioner argues is beyond the stipulated 7-day period from the notice service.

Key Issues

1. Whether the order dated 18.04.2024, passed by the Joint Commissioner of State Tax, Bhagalpur Division, violates the time limitation stipulated under Section 129(3) of the CGST Act, 2017, for passing an order after the service of notice? Petitioner's Contention: The petitioner argues that the order was passed beyond the 7-day period prescribed by Section 129(3) from the service of notice. They rely on the judgment in Pawan Carrying Corporation vs Commissioner CGST & Central Excise & Ors, stating no penalty order can be passed beyond this limitation. Revenue's Contention: The revenue contends that if the owner of the goods approaches the officer, penalty is imposed under Section 129(1)(a). They argue that since the reply was filed on 12.04.2024 (deemed service date), the proceedings should be taken under Section 129(1)(b). They also refer to M/s Sangam Wires vs the State of Bihar & Ors, and argue that the petitioner's remittance of amounts on 24.04.2024 makes Section 129(5) applicable.