Facts of the Case

M/s S.S. Enterprises filed CWP-24298-2023 (O&M) under Articles 226 and 227 of the Constitution of India before the High Court of Punjab and Haryana at Chandigarh, challenging a Physical Verification/Inspection Report issued in Form GST MOV-02 dated 28.09.2023 by the second respondent, and seeking release of the goods that were being detained along with the conveyance, which the petitioner described as being held illegally and arbitrarily. The goods were detained on 28.09.2023, but the petitioner approached the Court for the first time only on 19.10.2023, a gap of roughly three weeks during which the detention proceedings continued. In the interim, counsel for the State placed on record an order dated 18.10.2023 showing that the detention order had already been served on the person in charge of the conveyance on 04.10.2023, and that a further order dated 18.10.2023 had gone on to impose a penalty under clause (a) of sub-section (1) of Section 129 of the Haryana Goods and Services Tax Act, 2017, which by the time of the hearing had already been passed and was available on record. The matter was heard on 09.11.2023 by a Division Bench of Hon'ble Justices G.S. Sandhawalia and Lapita Banerji, with Mr. Kapish Chawla, Advocate, appearing for the petitioner and Ms. Mamta Singla Talwar, Deputy Advocate General, Haryana, appearing for the State.

Issues Involved

  1. Whether the writ court should exercise extraordinary jurisdiction to interfere with the Form GST MOV-02 inspection and the subsequent Section 129 penalty order, given the availability of a statutory appeal under Section 107 of the Haryana GST Act.
  2. What safeguards, if any, should be built into a relegation to the appellate remedy to protect the petitioner pending appeal.

Petitioner's Arguments

  • The physical verification/inspection in Form GST MOV-02 and the subsequent detention of goods and conveyance were illegal and arbitrary.
  • The action was in violation of Circular No.41 issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing.

Respondent's Arguments

  • The order dated 18.10.2023 imposing penalty under Section 129(1) of the Haryana GST Act was an appealable order under Section 107 of the Act, and the writ petition ought not to bypass that statutory remedy.

Court Order/Findings

  • The Court found that an alternative efficacious remedy under the Haryana GST Act was already available, and declined to exercise extraordinary writ jurisdiction, noting that the impugned order predated the petitioner's approach to the Court and had not been separately challenged at that stage.
  • The petitioner was granted liberty to file a statutory appeal on deposit of 25% of the penalty amount, with the balance recovery deemed stayed under Section 107(7) of the Act, and the appellate authority was directed to decide the appeal within two weeks of filing, retaining full power to set aside the order if found without jurisdiction.
  • The writ petition was disposed of accordingly, with pending applications also disposed of.

Important Clarification

Where a statutory appellate remedy with a pre-deposit and automatic stay mechanism under Section 107 of the GST Act is available against a Section 129 detention/penalty order, writ courts will ordinarily relegate the aggrieved party to that remedy rather than examine the detention on merits, though courts may still direct time-bound disposal of the appeal to protect the petitioner from prolonged uncertainty.

Sections Involved

  • Section 129 of the Haryana Goods and Services Tax Act, 2017 – detention, seizure and release of goods and conveyances in transit.
  • Section 107 of the Haryana Goods and Services Tax Act, 2017 – appeal to the Appellate Authority, including pre-deposit and stay of recovery under sub-section (7).
  • Form GST MOV-02 under the CGST Rules, 2017 – order for physical verification/inspection of the conveyance and goods.

Decision – In Favour of

This is a mixed, procedural outcome. The Court declined to interfere on merits, favouring the Department's preliminary stand that the alternate remedy applied, but it also granted the Assessee a concrete safeguard — a time-bound two-week appellate disposal with statutory stay on 25% deposit — so neither side secured an outright merits victory.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Punjab and Haryana at Chandigarh
  • Case No.: CWP-24298-2023 (O&M)
  • CNR: Not available on record
  • Coram: Hon'ble Justices G.S. Sandhawalia and Lapita Banerji
  • Decision Date: 09 November 2023
  • Disposal Nature: Writ petition disposed of, relegated to statutory appeal

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