Facts of the Case

The petitioner, M/s Bajaj Enterprises, a partnership firm based in Raipur represented by its partner Bharat Bajaj, challenged an undated order of demand of tax and penalty (Annexure P-1) passed by the Assistant Commissioner, Chhattisgarh State Tax, Surguja Circle, Ambikapur. The petitioner contended that the order had been passed under Section 129(1)(a) of the Central Goods and Services Tax Act, 2017 as it stood prior to its substitution with effect from 01.01.2022, i.e., under a provision that had by then been repealed.

Issues Involved

  1. Whether an order of demand of tax and penalty passed under the repealed provision of Section 129(1)(a) of the CGST Act (post its substitution with effect from 01.01.2022) is legally sustainable.

Petitioner's Arguments

  • The impugned undated order was passed under the repealed provision of Section 129(1)(a) of the CGST Act, which had been substituted by a new provision with effect from 01.01.2022, rendering the order completely illegal.

Respondent's Arguments

  • The State's counsel, on the strength of its reply, submitted that the impugned order was in fact passed on 13.10.2022 under the old provision of Section 129(1)(a), and prayed that the order may be quashed with liberty granted to pass a fresh order after issuing a fresh show cause notice.

Court Order / Findings

  • Justice Naresh Kumar Chandravanshi held that since the impugned undated order, as also the notice preceding it, was issued under the repealed provision of Section 129(1)(a) of the CGST Act, the order suffered from illegality since its inception, and the petition was allowed without discussing the merits of the case.
  • The impugned order was set aside/quashed, with liberty granted to the respondents to issue a fresh show cause notice and pass an appropriate order in accordance with law after affording due opportunity of hearing to the petitioner.
  • The bank guarantee furnished by the petitioner was directed to continue until the final order is passed, with adjudication to be completed preferably within 90 days from receipt of the order.

Important Clarification

  • An order of detention, demand of tax and penalty issued under a provision of the CGST Act that stands repealed or substituted as on the date of the notice/order is void ab initio for want of jurisdiction, irrespective of the underlying factual merits.
  • Such invalidity does not bar the department from initiating fresh proceedings under the correct, currently operative provision, provided a fresh show cause notice is issued and a proper hearing granted.

Sections Involved

  • Section 129(1)(a), Central Goods and Services Tax Act, 2017 — detention, seizure and release of goods and conveyances in transit; substituted with effect from 01.01.2022.

Decision – In Favour of

In favour of the Assessee — the impugned order was quashed for illegality on account of being founded on a repealed provision, with liberty reserved to the department to proceed afresh in accordance with law.

Case Details

Court: High Court of Chhattisgarh at Bilaspur
Case No.: WPT No. 203 of 2023
Neutral Citation: 2025:CGHC:60199
Coram: Hon'ble Shri Justice Naresh Kumar Chandravanshi
Date of Order: 11.12.2025

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