Writ is not maintainable to challenge transit penalties after voluntary payment and release of goods.
Issue
Whether a taxpayer can maintain a writ petition under Article 226 to challenge transit detention penalties and seek a refund on the grounds of an expired e-way bill and lack of tax evasion intent, when the person-in-charge voluntarily paid the tax and penalty without protest to secure the immediate release of the goods and failed to file a timely statutory appeal.
Facts
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Transit detention and penalty proceedings were initiated against the petitioner’s goods and conveyance while in transit.
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The tax authority issued a show-cause notice in FORM GST MOV-07 along with an electronic summary in Form GST DRC-01.
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The petitioner alleged that these notices were issued without granting a prior hearing.
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The petitioner asserted that the goods were fully covered by a valid, tax-paid invoice and an e-way bill, which had simply expired mid-transit due to a technical vehicle breakdown.
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The petitioner claimed there was zero intent to evade tax and that the penalty was paid under economic duress due to business urgency.
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The official record showed that the person-in-charge of the vehicle paid the proposed tax and penalty on the exact same day the MOV-07 notice was issued, without registering any formal protest.
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Following the payment, a release order in FORM GST MOV-05 was issued, and the tax authority immediately released both the goods and the vehicle.
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The petitioner did not file a statutory appeal under Section 107 within the legally prescribed limitation period.
Decision
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Voluntary Payment on Record: Held, yes. The court observed that the payment of tax and penalty appeared entirely voluntary on the record, as no formal protest or objection was raised by the person-in-charge at the time of the transaction.
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No Jurisdictional Error or Natural Justice Violation: Held, yes. The competent authority acted within its legal bounds, and the immediate payment and subsequent release of goods negated any active violation of natural justice.
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Writ Jurisdiction Not a Bypass for Limitation: Held, yes. The primary transit order was a statutory appealable order. Constitutional writ jurisdiction cannot be invoked simply to bypass an alternative statutory remedy that the taxpayer failed to pursue within the standard limitation period. The writ petition lacked merit and was dismissed.
Key Takeaways
Payment Concludes Transit Proceedings: Under Section 129 of the CGST Act, paying the tax and penalty demanded during a transit interception effectively concludes the detention proceedings. If a taxpayer intends to contest the merits of the detention later, they must ensure the payment is explicitly flagged as “under protest” or formally appeal the underlying order.
Exhaustion of Remedies is Mandatory: Failing to file a statutory appeal within the maximum permissible timeline under Section 107 does not automatically open the doors to a High Court writ. Unless there is a fundamental lack of jurisdiction or a patent violation of natural justice, writ courts will not salvage an elapsed limitation period.
| “i) | For issuing of a writ of certiorari or any other appropriate writ quashing/ setting aside the Summary of Show cause Notice for Penalty in the form of DRC-01 vide Reference No-ZD101025012053I dated 13.10.2025 and Show Cause Notice in FORM GST MOV-07 vide Process No: Nil dated 13.10.2025 (as contained in Annexure-P1D and Annexure-P1E) which was issued by the Respondent No. -4 without affording any opportunity of hearing in violation of S 129(4) BGST/CGST Act, 2017 which render the entire proceedings of Respondent No- 4 violative of principles of natural justice and thus liable to be set aside. |
| (ii) | For issuing a writ of certiorari or any other appropriate writ quashing/ setting aside the Summary of Show cause Notice for Penalty in the form of DRC-01 vide Reference No-ZD101025012053I dated 13.10.2025 and Show Cause Notice in FORM GST MOV-07 vide Process No: Nil dated 13.10.2025 (as contained in Annexure-P1D and Annexure-P1E) issued by the Respondent No-4 were not lawful as goods detained by him was backed by valid tax paid invoice and E-way bill which had just expired during transportation due to some technical snag in the vehicle and there was no intention to evade tax by the petitioner and e way bill had just expired and this e way bill could not be extended in time as the vehicle was on the way to destination and not taking notice of the reply submitted by the petitioner to the show cause notice renders the entire proceedings of Respondent No-4 get invalid and thus liable to be set aside. |
| (iii) | For issuance of appropriate direction or any other appropriate writ to the Respondents to refund the penalty amount of Rs.2,00,090.00/-paid under CGST and BGST Act, 2017 along with interest which was deposited under duress as goods in transportation was urgently needed for business purpose and goods in transportation was covered by tax invoice and E Way Bill. |
| (iv) | For granting any other relief (s) to which the petitioner is otherwise found entitled to in accordance with law.” |