The High Court of J&K and Ladakh has set aside an order imposing penalty under Section 129(3) of the CGST Act along with the appellate order confirming it, holding that the seven-day timeline prescribed under Section 129(3) for issuing a notice specifying the penalty payable after detention and seizure of goods is mandatory, and even a delay of one day vitiates the entire proceedings. The ruling by Acting Chief Justice Sanjeev Kumar and Justice Mohd Yousuf Wani in WP(C) 2538/2024 (Danish Hassan, decided 07.09.2026) follows the court’s own recent ruling in Mohd. Hazzak Lohar v. Commissioner State Taxes (WP(C) 2434/2025, decided 23.07.2026).
The goods along with the conveyance were detained on 02.09.2024. The notice was issued on 11.09.2024 and uploaded on 12.09.2024 — beyond the seven-day window. The court found that the Proper Officer was under a statutory obligation to issue the show cause notice within seven days of detention/seizure and pass the penalty order within a further seven days from service of notice. The court reiterated five reasons why the timelines in Section 129(3) are mandatory: the provision regulates exercise of coercive statutory power; it protects valuable primary rights; the legislature has used ‘shall’; treating timelines as directory would defeat the purpose of preventing prolonged detention; and the absence of express consequences is not always decisive. The penalty deposited was directed to be released. Liberty was preserved for the respondents to pursue any other permissible proceedings under the Act.
- 2026-juristway.com-2500-HC(J&K and Ladakh)-GST | High Court of J&K and Ladakh | WP(C) 2538/2024 | 07.09.2026