Facts of the Case

Moothedan Overseas approached the Kerala High Court in connection with proceedings initiated against it under Section 129 of the CGST/SGST Acts.

The record shows that the underlying transaction was supported by Invoice No. 170 dated 28.08.2020 and E-Way Bill No. 551198457450 dated 28.08.2020.

In connection with the movement and detention proceedings, the Assistant State Tax Officer (Intelligence), Squad No. III, SGST Department, Kerala, issued:

  • Form GST MOV-02 dated 29.08.2020;
  • Form GST MOV-06 dated 03.09.2020; and
  • Form GST MOV-07 dated 03.09.2020.

The proceedings under Section 129 remained pending. However, the goods in question had already been released to the petitioner pursuant to an interim order of the Kerala High Court.

At the stage of final consideration of the writ petition, the petitioner sought a limited relief: a direction to the first respondent to complete the pending proceedings under Section 129 within a specified time frame.

The High Court considered this limited request and disposed of the writ petition by directing time-bound completion of the proceedings.

Issues Involved

The principal issues arising from the proceedings were:

  • Whether the pending proceedings initiated against the petitioner under Section 129 of the CGST/SGST Acts should be completed within a fixed time frame.
  • Whether the pendency of Section 129 proceedings should continue indefinitely after the goods had already been released pursuant to an interim judicial order.
  • Whether the first respondent should be directed to conclude the proceedings forming the subject matter of Ext. P5 notice in Form GST MOV-07.
  • Whether the High Court should adjudicate the substantive merits of the detention proceedings or confine relief to a direction for expeditious completion.

Petitioner’s Arguments

The petitioner submitted that it was facing proceedings under Section 129 of the CGST/SGST Acts.

It was pointed out that the goods in question had already been released pursuant to an interim order passed by the High Court.

The petitioner did not seek, at the stage of final disposal recorded in the judgment, a detailed adjudication by the High Court on the merits of the detention proceedings.

Instead, learned counsel for the petitioner made a limited request that the first respondent be directed to complete the proceedings under Section 129 within a definite time frame.

The petitioner therefore sought expeditious conclusion of the proceedings that were the subject matter of Ext. P5 notice.

Respondents’ Arguments

The learned Senior Government Pleader was heard on behalf of the respondents.

The judgment does not record any elaborate independent counter-argument on the merits of the alleged contravention, detention or proposed liability under Section 129.

The High Court proceeded on the basis of the limited nature of the relief sought by the petitioner and issued a direction for completion of the statutory proceedings within a fixed period.

Accordingly, no broader respondent contention on the substantive merits of the Section 129 action was adjudicated in the final judgment.

Court Order / Findings

The Kerala High Court noted two central facts:

  • the petitioner was facing proceedings under Section 129 of the CGST/SGST Acts; and
  • the goods had already been released to the petitioner pursuant to an interim order of the Court.

The Court further recorded that the petitioner sought only a limited direction requiring the first respondent to complete the Section 129 proceedings within a time frame.

Having regard to this limited relief, the High Court disposed of the writ petition with a direction to the first respondent to complete the proceedings initiated against the petitioner under Section 129 of the CGST/SGST Acts.

The Court specifically linked the direction to the proceedings that were the subject matter of Ext. P5 notice.

The proceedings were directed to be completed within two months from the date of receipt of a certified copy of the judgment.

Final Order

The Kerala High Court disposed of the writ petition by directing:

The Assistant State Tax Officer (Intelligence), Squad No. III, SGST Department, Kerala, to complete the proceedings initiated against the petitioner under Section 129 of the CGST/SGST Acts, forming the subject matter of Ext. P5 notice, within two months from the date of receipt of a certified copy of the judgment.

Important Clarification

This judgment does not quash the Section 129 proceedings.

It also does not hold that the detention of goods was illegal, nor does it decide whether tax and penalty were ultimately payable by the petitioner.

The High Court did not adjudicate the substantive merits of:

  • the Invoice dated 28.08.2020;
  • the E-Way Bill dated 28.08.2020;
  • Form GST MOV-02;
  • Form GST MOV-06;
  • Form GST MOV-07;
  • the grounds underlying the detention proceedings; or
  • the petitioner’s ultimate liability under Section 129.

The relief granted was strictly procedural and time-bound. The Court directed the competent authority to complete the pending statutory proceedings within two months.

Another important clarification is that the prior release of goods under an interim order did not, by itself, terminate the underlying Section 129 proceedings. The proceedings remained to be completed by the competent authority in accordance with law.

Sections / Provisions Involved

Section 129 of the CGST Act / SGST Act – Central provision governing detention, seizure and release of goods and conveyances in transit in cases covered by the statutory conditions.

Articles 226 and 227 of the Constitution of India – Constitutional writ jurisdiction invoked before the High Court, as reflected by the nature of the writ proceedings.

Form GST MOV-02 – Notice/order connected with physical verification or inspection proceedings, as appearing in the petitioner’s exhibits.

Form GST MOV-06 – Order dated 03.09.2020 forming part of the detention-related proceedings.

Form GST MOV-07 – Notice dated 03.09.2020, marked as Ext. P5, which formed the specific subject matter of the pending Section 129 proceedings directed to be completed.

Documentary Record Referred to in the Judgment

The appendix to the judgment records the following exhibits:

Exhibit P1: Invoice No. 170 dated 28.08.2020.

Exhibit P2: E-Way Bill No. 551198457450 dated 28.08.2020.

Exhibit P3: Notice in Form GST MOV-02 dated 29.08.2020 issued by the first respondent.

Exhibit P4: Order in Form GST MOV-06 dated 03.09.2020 issued by the first respondent.

Exhibit P5: Notice in Form GST MOV-07 dated 03.09.2020.

These documents formed the procedural background of the Section 129 proceedings, though the High Court did not decide their substantive validity in the final judgment.

Link to download the order -

https://mytaxexpert.co.in/uploads/1783496458_1520compressed.pdf

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