Calcutta High Court Quashes ₹25.23 Lakh GST Penalty, Orders Release Of Two Detained Trucks
The Calcutta High Court on 14 October quashed GST penalty orders totalling Rs. 25.23 lakh imposed on two detained trucks, holding that the authorities passed the orders beyond the statutory deadline under Section 129(3) of the Central Goods and Services Tax (CGST) Act, 2017.
A Single-Judge Bench of Justice Aryak Dutt allowed a petition filed by truck owner Permender Singh, holding that the penalty orders were barred by limitation and passed without jurisdiction. He also held:
“An appeal under Section 107 of the Act is available. But an alternative remedy does not bar a writ petition where the impugned order was passed without jurisdiction. Relegating the petitioner to an appeal would serve no purpose.”
Singh owned two goods vehicles that he had hired to a transporter to carry MS scrap from Guwahati, Assam, to Purnea, Bihar, on 9 July 2025. GST authorities intercepted the vehicles in Jalpaiguri, West Bengal, on 11 July 2025.
The authorities detained the vehicles and goods after finding that the supplier's GST registration had been suspended. They treated the tax invoices and e-way bills as invalid and initiated proceedings under Section 129 of the CGST Act and the West Bengal Goods and Services Tax (WBGST) Act.
Subsequently, the authorities issued show-cause notices proposing penalties on 17 July 2025, requiring Singh to appear by 24 July 2025. However, they passed the final penalty orders only on 15 January 2026, imposing penalties of Rs. 12,67,640 and Rs. 12,55,600 for the two vehicles, respectively.
Singh argued that Section 129(3) requires the proper officer to pass an order within seven days of serving the notice. He contended that the authorities had exceeded the statutory deadline and therefore lacked jurisdiction to impose the penalties. He also submitted that he merely owned the vehicles and had no role in preparing the invoices or e-way bills.
The State authorities attributed the delay to proceedings before the Gauhati High Court concerning the supplier's GST registration. The Calcutta High Court noted that the Gauhati High Court had not stayed the proceedings under Section 129 and that Singh was not a party to those proceedings.
Relying on decisions of the Patna, Gujarat and Tripura High Courts, the Bench held that the time limit under Section 129(3) was mandatory. It observed that the State had neither explained the delay of nearly six months nor cited any contrary judicial precedent.
Accordingly, the High Court quashed both penalty orders and directed the authorities to release the vehicles within seven days of communication of the order without insisting on payment of the disputed amount, clarifying that the ruling would not prevent otherwise permissible proceedings against the supplier or recipient of the goods.
For the petitioner: Senior Advocate Mr. Sudhir Meheta, Mr. A.K. Upadhyay, Mr. Ashok Dey and Ms. S. Banerjee.
For the State: Mr. Bijitesh Mukherjee and Ms. Manasi Mukherjee.
For the Union of India: Mr. Sujit Bhunia and Ms. Oisani Mukherjee.