Order dated 29 August 2022

Key Pointers:

• The petitioner’s, D.K. ENTERPRISES, consignment was intercepted on 13.08.2022 at and immediately upon interception, statement of the driver in Form GST MOV-01 was issued on the same day.
• The reason for interception was the presumption of the officer that the goods were proposed to be unloaded at an unregistered place.
• On 13.08.2022, Form GST MOV – 04, being physical verification report was also issued.
• Petitioner contended that thereafter, there has been no notice issued by the respondents in terms of Section 129 (3) of the Goods and Services Tax Act, 2017 (in short ‘Act’) requiring a show cause notice to be issued within 7 days from date of detention/seizure and hence this Writ Petition.
• Further, it was submitted that Section 129(3) requires a notice to be issued within 7 days, stipulating the penalty payable for the alleged discrepancy and in this case, no notice was issued till 24.08.2022, when notice ostensibly dated 22.08.2022, has been sent, produced in the course of hearing.
• In light of the above, the petitioner argues that there has been no proper procedure followed, in any event, none, in line with the statutory prescription and the actions of the respondents have been irregular and contrary to the Statute and Regulations.
• High Court observed that there are serious flaws in the procedure followed as neither order of detention nor SCN have been issued within time. A combined appreciation of the proviso under Section 129(1) and 129(3) makes it apparent that the order of detention is intended to be issued prior to the issuance of the SCN, which, in terms of Section 129(3), must be issued within 7 days from the date of detention/seizure.
• Incidentally, notice has, admittedly, not been issued on 22.08.2022, but only on 24.08.2022. That apart, Section 129(3), read with the proviso thereunder, requires a show cause notice to be issued within 7 days of detention or seizure. Vide an amendment brought to clause 2(e) of Circular dated 13.04.2018 vide Circular No.49/23/2018-GST dated 21.06.2018 in F.No.CBEC/20/16/03/2017-GST, the expression ‘three working days’ in the April circular has been replaced by the expression ‘three days’.
• Thus, in matters of interception, seizure and detention, it is clear that the GST Department does not recognise the concept of ‘working day’ and ‘holiday’ and rightly so, since substantial civil rights of the parties are at stake by the aforesaid powers. 
• Thus, and as the detention is a pre-condition/requisite for the issuance of the SCN, the order of detention is necessarily to be issued prior to the 7th day from date of detention/seizure of the conveyance/consignment in question, being, in this case, on or before the 20.08.2022, to validate both the interception and the SCN.
• In this context, learned Additional Government Pleader relies upon Section 10 of the General Clauses Act, 1897, as per which, if any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within the prescribed period and if the office or Court were closed on that day or the last day of prescribed period, that act or proceeding shall be considered as done or taken in due time if it done or taken on the next day afterwards when the Court or office were open.
• In my considered view, there is no necessity to refer to the Section 10 in the present situation. The Goods and Services Tax Department has, by amendment brought on 21.06.2018, effaced the difference between a working day and a holiday. Revenue counsel also confirms that interception, detention and seizure of vehicles and consignments take place without reference to day or time and the roving squad is on duty at all times, 24/7, 365 days of the year. 
• In these circumstances, reference to Section 10 is of no assistance to the revenue.
• Hence, High Court found that the procedure that has been followed by the respondents in this matter is contrary to statutory requirements as well as the instructions issued by the Commissioner. The submissions of the revenue, that the Circular has no statutory force and the instructions thereunder are to be taken as flexible, were rejected.