Danish Hassan v. Union Territory of J&K & Ors.

                                                  Serial No. 32


                                                REGULAR CAUSE LIST





   HIGH COURT OF JAMMU & KASHMIR AND LADAKH


                   AT SRINAGAR











                        WP(C) 2538/2024





DANISH HASSAN                                       …Petitioner(s)





Through: Mr. Zaffer Qadri, Advocate





                               Vs.





UT OF J&K & ORS.                                 ...Respondent(s)





Through:   Mr. Mohsin Qadri, Sr. AAG with


           Ms. Maha Majeed, AC





CORAM:


HON’BLE THE CHIEF JUSTICE (ACTING)


HON’BLE MR. JUSTICE MOHD YOUSUF WANI, JUDGE


                            ORDER


                            07.09.2026


  01. Impugned in this petition filed by the petitioner under


     Article 226 of the Constitution is an order dated 28.10.2024,


     passed by the Appellate Authority Appeals I-State Taxes


     Department Kashmir in appeal titled as “M/s Stage Trading


     Pvt. Ltd. Srinagar Vs. UT of J&K & Ors.”, whereby the


     Appellate Authority has confirmed the order of Deputy


     Commissioner, State Taxes Enforcement (Central) Kashmir


     dated 17.09.2024 passed under Section 129 (3) CGST 2017


     [“the Act].


  02. The impugned order passed by the Deputy Commissioner,


     State Taxes Enforcement (Central), Kashmir and order in


     appeal passed by the Appellate Authority are assailed by the


     appellant primarily on the ground that the Proper Officer


     having failed to serve upon the petitioner a notice within a


     period of seven days from the date service of notice of


     detaining/seizing of goods or conveyance has acted in


     violation of provisions of Section 129(3) of the Act, and,


  therefore, the orders impugned are vitiated in law. Reliance


  is placed by the learned counsel appearing for the petitioner


  on a judgment rendered by this Court on 23.07.2026 in


  WP (C) No. 2434/2025 titled as “Mohd. Hazzak Lohar &


  Anr. Vs. Commissioner State Taxes and Anr.” whereby this


  Court has held the provisions of Sub Section 3 of Section 129


  of CGST Act, mandatory in nature.


03. Heard learned counsel for the parties and perused material


  on record.


04. What is held by this Court is set out in para 17, 18 and 19


  which for facility of reference are set out below:-


        17. We are, thus, inclined to concur with a view taken by


               various High Courts and the High Court of Gujarat that


               the timelines under Section 123 of the Act are


               mandatory. This is so primary for the following reasons:


        (i)       The provision regulates exercise of coercive statutory


                  power;


        (ii)      It protects valuable primary rights;


        (iii)     The legislature has prescribed timelines using the


                  word “shall”;


        (iv)      Treating timelines in Section 129(3) as directory


                  would defeat the legislative purpose of preventing


                  prolonged detention and seizure of goods, conveyance


                  or documents of the transporter or the assesee;


        (v)       The absence of express consequences of a mandatory


                  provision is not always decisive.


        (vi)      The legislative intent, object of provision and the


                  nature of right affected are governing tests.


        (vii) Whenever the statute authorizes coercive action, like


                  seizure or detention, the Courts insist on strict


                  compliance with the statutory procedure.


        18. It is, thus, beyond any pale of discussion that whether the


               provision is mandatory or not, depends upon the


               legislative intent, context, object and the consequences of


               non-compliance.


        19. From the perusal of the provision in question in the


           context of the scheme of the Act of 2017, it is axiomatic


           that the timelines have been introduced to prevent


           arbitrary detention, prolonged seizure and harassment to


           the trader. It is in keeping with the aforesaid intention


           that the legislature has used the expression “shall” at


           two places in Section 129 (3) of the Act.


05. When we examine the case on hand in the light of law laid


   down in Mohd. Hazzak Lohar (supra), we find that in the


   instant case the Proper Officer detained the goods along


   with conveyance on 02.09.2024, and, therefore, was under an


   obligation to issue notice of show cause within seven days of


   such seizure and detention.


06. The notice intimating order of detention and seizure and


   specifying the penalty payable was issued on 11.09.2024 and


   uploaded on 12.09.2024. The Proper Officer was further


   under an obligation to pass an order for payment of penalty


   within a period of seven days from the date of service of


   such notice.


07. The notice dated 11.09.2024 admittedly was uploaded on


   12.09.2026 i.e beyond a period of seven days. In that view of


   the matter, the mandate of Sub Section 3 of Section 129 of the


   Act was violated by the Proper Officer. There was a delay of


   one day in issuing the notice, which vitiates the entire


   proceedings.


08. For the foregoing reasons, the writ petition is allowed. The


   impugned order of the appellate Authority dated 28.10.2024


   and order of Proper Officer dated 17.09.2024 are set aside,


   having been issued in violation of the mandatory provisions


   of Sub Section 3 of Section 129 of the Act. We, however,


   make it clear that notwithstanding the quashing of the


   notice/order dated 11.09.2024 uploaded on 12.09.2024 the


   proceedings, if any, permissible under the provisions of the


      Act of 2017 can still be pursued by the respondents if


      required.


   09. Let the amount of penalty which has been deposited before


      this Court in terms of order dated 17.12.2024, be released in


      favour of the petitioner after due verification.


   10. Disposed of.


              (Mohd Yousuf Wani)                           (Sanjeev Kumar)


                   Judge                                   Chief Justice (A)





SRINAGAR:


07.09.2026


“S. NUZHAT”


                “Whether approved for reporting? Yes/No”