GST Demand for Tax and Penalty Set Aside as demand was issued more than 7 days from the date of notice u/s 129

By | January 25, 2025
(Last Updated On: January 25, 2025)

GST Demand for Tax and Penalty Set Aside as demand was issued more than 7 days from the date of notice u/s 129

Summary in Key Points:

  • Issue: Whether a demand for tax and penalty under Section 129 of the GST Act is valid when it is issued beyond the prescribed time limit.
  • Facts: A detention order and notice were issued on August 31, 2024. However, the demand for tax and penalty was issued on September 11, 2024, exceeding the seven-day time limit prescribed under Section 129.
  • Decision: The High Court held that the demand for tax and penalty was time-barred and therefore invalid. The demand was set aside and quashed.

Decision:

The High Court ruled in favor of the assessee, setting aside and quashing the demand for tax and penalty. The court emphasized the following:

  • Time Limit under Section 129: Section 129 of the GST Act prescribes a strict time limit of seven days for issuing a demand for tax and penalty after the issuance of a notice.
  • Time-Barred Demand: The demand in this case was issued beyond the seven-day time limit, making it time-barred and invalid.
  • Strict Interpretation: The court strictly interpreted the time limit prescribed under Section 129, highlighting the importance of adhering to statutory timelines in GST proceedings.

Important Note: This case underscores the importance of adhering to the statutory timelines prescribed in the GST Act. Any demand issued beyond the prescribed time limit can be challenged and set aside as time-barred. This decision serves as a reminder to tax authorities to ensure that all demands and notices are issued within the stipulated timeframes to avoid procedural lapses that could invalidate their actions.

HIGH COURT OF ORISSA
S.A. Sugandh (P.) Ltd.
v.
Chief Commissioner of CT & GST
Arindam Sinha and M.S. Sahoo, JJ.
W.P.(C) No.31019 of 2024
DECEMBER  12, 2024
R.P. Kar, Sr. Adv. and Ms. I. Tripathy, Adv. for the Petitioner. Sunil Mishra, Adv. for the Respondent.
ORDER
1. Mr. Kar, learned senior advocate appears on behalf of petitioner and submits, impugned is order of demand of tax and penalty dated 11th September, 2024. He demonstrates from disclosures in the petition, detention order is dated 30th August, 2024 and the notice issued, next day (31st August, 2024). Relying on our view expressed in judgment dated 3rd September, 2024 on W.P. (C) no.21541 of 2024 (RSL Overseas LLP, Kolkata and another v. State of Odisha and others), paragraph-7 he submits, impugned demand was issued more than seven days from the date of notice. He seeks interference for setting aside impugned demand.
2. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and hands up ‘datewise movement of detained vehicle’ as his instruction dated 18th November, 2024.
3. We do not see there can be dispute on time taken for issuing impugned demand of tax and penalty. The notice is dated 31st August, 2024 and impugned demand followed on 11th September, 2024. Clearly, it was made out of time prescribe in section 129, Odisha Goods and Services Tax Act, 2017.
4. Impugned demand is set aside and quashed. The writ petition is allowed and disposed of.
Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com