Facts of the Case

The petitioner's vehicle bearing registration No. HR38 AE 4580 was detained, along with goods, by the State Tax authorities at the Mobile Squad Office, Rudrapur, Uttarakhand, under Section 129 of the GST Act. A Summary Show Cause Notice dated 21.11.2023 in FORM GST DRC-01 was issued, followed by a summary order in FORM DRC-07 and a detailed order dated 28.11.2023 confirming penalty. The petitioner approached the Uttarakhand High Court under Article 226 seeking quashing of the notice and orders, and release of the detained vehicle and goods.

Issues Involved

  1. Whether the impugned show-cause notice and orders under Section 129 warranted interference in writ jurisdiction.
  2. Whether the detained vehicle and goods could be released, pending resolution, upon the petitioner depositing the penalty amount.

Petitioner's Arguments

  • The summary order (FORM DRC-07) and the detailed order dated 28.11.2023 under Section 129, along with the preceding show-cause notice, were liable to be quashed.
  • The petitioner was ready to deposit the penalty amount demanded, and sought release of the vehicle and goods detained at the Mobile Squad Office, Rudrapur.

Respondent's Arguments

  • No specific opposing submissions are recorded; the State's counsel appeared, and the matter proceeded on the petitioner's offer to deposit the penalty amount.

Court Order/Findings

  • The Court did not adjudicate the legality of the Section 129 proceedings on merits, and instead disposed of the petition on the petitioner's own offer to deposit the penalty amount.
  • The petitioner was directed to make a representation, with the deposit receipt, before the concerned authorities within one week.
  • On receipt of such representation, the authorities were directed to decide on releasing the goods and vehicle within one further week.

Important Clarification

  • Where a person whose goods/vehicle are detained under Section 129 is willing to deposit the penalty amount, courts may dispose of the petition by directing time-bound release, without deciding the legality of the detention.
  • Such a disposal is not a finding on the merits of the show-cause notice or detention order; it merely facilitates interim release upon deposit.

Sections Involved

  • Section 129, Central Goods and Services Tax Act, 2017 — provides for detention, seizure and release of goods and conveyances in transit for contravention of the Act, including through payment of tax and penalty.
  • FORM GST DRC-01 and FORM GST DRC-07 — forms under the CGST Rules for a show-cause notice and summary of the order, respectively.

Decision – In Favour of

Disposed of with directions; in part favourable to the Petitioner. The Court did not quash the Section 129 proceedings but secured time-bound release of the vehicle and goods on deposit of the penalty, without expressing any opinion on the merits.

Related Case Laws

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

Case Details

  • Court: High Court of Uttarakhand
  • Case No.: WPMS No. 3340 of 2023
  • Coram: Justice Rakesh Thapliyal
  • Decision Date: 19.12.2023
  • Disposal Nature: Disposed of with directions

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