Facts of the Case

M/s Mysore Steels, a proprietorship represented by Mr. A.M. Shabandri, challenged a penalty order dated 23.03.2020 passed under Section 129(3) of the CGST Act and the corresponding State/UTGST provisions, and Section 20 of the IGST Act, issued in Form MOV-09 by the Commercial Tax Officer (Enforcement-8), Mysore. The writ petition, filed on 24.08.2021, sought quashing of the penalty order on various grounds. The matter remained pending before the Karnataka High Court for over four years before being finally heard and disposed of on 24.11.2025.

Issues Involved

  1. Whether the High Court should exercise writ jurisdiction to examine the merits of a Section 129(3) penalty order despite the availability of a statutory appellate remedy under Section 107 of the KGST Act.
  2. Whether the period during which the writ petition remained pending should be excluded for computing limitation for filing a statutory appeal.

Petitioner's Arguments

  • The petitioner urged several contentions against the validity and correctness of the penalty order passed in Form MOV-09.
  • It was contended that the order was liable to be quashed as being contrary to the provisions governing detention and penalty under Section 129 of the CGST Act.

Respondent's Arguments

  • The Department, represented by the High Court Government Pleader, accepted notice and did not resist the availability of the alternate remedy of appeal being pointed out by the Court.
  • The Revenue's stance implicitly supported relegating the petitioner to the statutory appellate mechanism rather than a merits adjudication in writ jurisdiction.

Court Order / Findings

  • The Court held that although several contentions were urged, given the availability of an equally efficacious and alternate remedy of appeal under Section 107 of the KGST Act, 2017, it was just and proper to dispose of the petition by relegating the petitioner to the appellate authority.
  • The petition was disposed of with liberty to the petitioner to prefer an appeal within eight weeks, with the entire period from filing of the writ petition (24.08.2021) till the date of the order (24.11.2025) excluded for computing limitation under Section 14 of the Limitation Act, 1963.

Important Clarification

  • Where an equally efficacious statutory appellate remedy exists under Section 107 of the GST Act, the High Court will ordinarily decline to examine the merits of a Section 129(3) penalty order in writ jurisdiction.
  • When a writ petition has been pending for a long period before being relegated to the appellate authority, the entire period of pendency is liable to be excluded while computing the limitation for filing the statutory appeal, protecting the assessee from being time-barred.

Sections Involved

  • Section 129(3), CGST Act, 2017 — provides for imposition of penalty upon detention/seizure of goods and conveyances in transit.
  • Section 107, KGST Act, 2017 — statutory appellate remedy against orders passed by adjudicating/enforcement authorities.
  • Section 20, IGST Act, 2017 — applies CGST provisions, including penalty provisions, mutatis mutandis to IGST.
  • Section 14, Limitation Act, 1963 — exclusion of time spent bona fide prosecuting another proceeding while computing limitation.

Decision – In Favour of

The matter was disposed of with directions, in part in favour of the assessee (Mysore Steels), who was given liberty to pursue the statutory appeal with the benefit of limitation exclusion, without any adjudication on the merits of the penalty itself.

Case Details

High Court of Karnataka at Bengaluru; Writ Petition No. 3936 of 2022 (T-RES); Coram: Hon'ble Mr. Justice S.R. Krishna Kumar; Order dated 24.11.2025.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.