(2026) 1 GSTAT E- Journal 90 (Thiruvananthapuram)Section 129Decision: In Favour of Assessee
GSTAT on Section 129(3) Limitation: 7-Day Timeline to Pass Penalty Order Is Mandatory; MOV-09 After 47 Days Void
The GSTAT Thiruvananthapuram Bench held that the 7-day period prescribed under Section 129(3) of the CGST/KGST Act for passing a penalty order is strictly mandatory. A Form GST MOV-09 order passed 47 days after service of notice is barred by limitation and void ab initio.
Case Name / Parties
Siddhi Vinayak Automobiles v. The Commissioner Of Kerala State GST, Thiruvananthapuram
Appeal Number
APL/2/TVP/2026
Tribunal Bench
Thiruvananthapuram Bench
Date of Judgment / Order
14/08/2026
Coram
Hon'ble Shri Subramanya V Rayaprol, Judicial Member • Hon'ble Shri Ramamoorthi Sriram, Technical Member
For Appellant: Mr M Unnikrishnan, Chartered Accountant
For Respondent: Mr M. I. Mansur, Joint Commissioner, Authorized Representative
Facts of the Case
The Appellant, an automobile spare parts dealer, supplied goods in vehicle KL22N0394 covered by valid tax e-invoices G-168 (₹3,41,952/-) and G-169 (₹4,498/-) dated 16.04.2022 to a registered buyer. On 18.04.2022, the vehicle was intercepted by Mobile Squad IV, Kollam at Punalur without an E-way bill. Detention notice in Form GST MOV-07 was issued on 18.04.2022 proposing 100% penalty of ₹1,38,706/- (CGST ₹69,353/- and SGST ₹69,353/-). The goods and vehicle were released on 20.04.2022 upon furnishing a Bank Guarantee. However, the Proper Officer passed the final penalty order in Form GST MOV-09 on 04.06.2022—exactly 47 days after the service of MOV-07 notice. The First Appellate Authority dismissed the taxpayer's appeal. On second appeal, the taxpayer challenged the order as time-barred under Section 129(3).
Issues Before GSTAT
- 1Whether the timeline of seven days prescribed under Section 129(3) of the CGST/KGST Act for passing an order specifying penalty is mandatory or directory.
- 2Whether a penalty order in Form GST MOV-09 passed 47 days after service of notice in Form GST MOV-07 is illegal, time-barred, and without jurisdiction.
- 3Whether the limitation ground under Section 129(3) can be entertained by the GSTAT when it was not specifically adjudicated before the First Appellate Authority.
Relevant Statutory Provisions & Rules
Statutory Sections
Section 68 of CGST/KGST Act, 2017Section 129 of CGST/KGST Act, 2017Section 129(1) of CGST/KGST Act, 2017Section 129(3) of CGST/KGST Act, 2017Section 169 of CGST/KGST Act, 2017
GST Rules
Rule 138A of CGST/KGST Rules, 2017Rule 142 of CGST/KGST Rules, 2017
Contentions of the Parties
Appellant / Taxpayer Contentions
- •Section 129(3) uses the imperative term 'shall', mandating that the proper officer pass an order within seven days from the date of service of notice.
- •Passing MOV-09 after 47 days is a flagrant violation of the statutory limitation, rendering the order void ab initio as held by High Courts of Gujarat, Madras, Patna, Orissa, and J&K.
- •The goods were covered by genuine e-invoices auto-populated into GSTR-1, and applicable tax was duly discharged, proving total absence of mens rea.
- •Limitation goes to the root of jurisdiction and can be raised at any appellate stage based on undisputed dates on record.
Respondent / Revenue Contentions
- •Section 129(3) does not explicitly prescribe consequences for delay; hence, the timeline is directory.
- •The goods were released within two days upon furnishing a bank guarantee, so no prejudice was caused to the taxpayer.
- •The appellant failed to raise the limitation plea before the First Appellate Authority and should not be permitted to raise it for the first time before the Tribunal.
Findings of GSTAT
Section 129(3) uses the expression 'shall' twice: the officer shall issue notice within seven days of detention and thereafter pass an order within seven days from the date of service of notice. In a fiscal statute authorizing coercive seizure, adherence to statutory timelines is strictly mandatory.
Treating the timeline in Section 129(3) as directory would defeat the legislative purpose of preventing prolonged detention, harassment, and indefinite pendency of proceedings. Followed Gujarat HC in Allcargo Logistics & Khatu Enterprises, Madras HC in Deepam Roadways, and Patna HC in Pawan Carrying Corp.
The MOV-09 order passed on 04.06.2022—47 days after the MOV-07 notice of 18.04.2022—is time-barred, non-est, and without jurisdiction.
A pure jurisdictional defect apparent on the face of the record (dates of MOV-07 and MOV-09) can be examined by the Appellate Tribunal even if not properly considered by the First Appellate Authority.
On facts, valid e-invoices had been generated and tax paid in April 2022 returns, completely negating any intention to evade tax.
Ratio Decidendi
Key Legal Principle
“The seven-day statutory limitation prescribed under Section 129(3) of the CGST/KGST Act for passing a penalty order is strictly mandatory. An order in Form GST MOV-09 passed beyond seven days from the date of service of notice is barred by limitation and void for want of jurisdiction.”
Final Decision & Relief Granted
Outcome: The appeal was allowed with consequential relief. The Order-in-Appeal and the MOV-09 penalty order dated 04.06.2022 were set aside as illegal and time-barred. The Respondent was directed to release the Bank Guarantee of ₹1,38,706/- immediately.
Relief Granted: Quashing of time-barred Section 129(3) penalty order; immediate release and discharge of the Bank Guarantee.
Operative relief was verified against the Tribunal's order and accurately summarized without altering its legal effect.
Practical Implications for Taxpayers
- Whenever a vehicle is detained and Form GST MOV-07 is served, calendar the 7th day immediately.
- If the Proper Officer passes the MOV-09 penalty order on the 8th day or later, the penalty is void on limitation grounds alone, regardless of the merits of the E-way bill lapse.
- Track the exact mode and date of service under Section 169 (portal upload, speed post, physical handing over) to document when the 7-day clock started running.
Practical Takeaways for Tax Professionals
- Always plead the Section 129(3) mandatory 7-day limitation as Ground No. 1 in all transit penalty appeals.
- Rely on the extensive line of High Court authorities cited in this judgment (Allcargo Logistics, Deepam Roadways, Pawan Carrying, K.P. Sugandh, Mohd Hazzak Lohar) to establish that absence of an explicit penalty clause in Section 129(3) does not make the timeline directory.
- Insist on immediate release of bank guarantees or cash deposits where MOV-09 is vitiated by limitation delay.
SKM
Editorial Commentary
SKM Laws Professional Analysis
Siddhi Vinayak Automobiles is an essential precedent establishing strict procedural accountability for GST tax enforcement. In practice, mobile squad officers frequently issued MOV-07 notices, released vehicles on onerous bank guarantees, and then allowed penalty files to languish for months before churning out generic MOV-09 orders. By holding that the 7-day timeline under Section 129(3) is an inflexible jurisdictional boundary, GSTAT Thiruvananthapuram has curbed administrative inertia. When a fiscal statute confers extraordinary powers to detain private property in transit, the statutory safeguards protecting citizens from prolonged proceedings must be enforced with equal rigour.
Related Cases & Precedents
(2026) 1 GSTAT E-Journal 80
Holding Section 129 inapplicable to same-GSTIN non-supply movements.
(2026) 1 GSTAT E-Journal 75
Quashing Section 129 penalties for bona fide 9-minute delay in E-way bill generation.
Related GST Tools & Utilities
Source Citation & Forensic References:
Official Citation: (2026) 1 GSTAT E- Journal 90 (Thiruvananthapuram)
Source Publication: GSTAT E-Journal, Volume I (Till 31.08.2026), Published by Goods and Services Tax Appellate Tribunal
Journal Pages: 90-98
Legal Information Disclaimer
This case law analysis is published strictly for informational, educational, and research purposes. It does not constitute legal, tax, or professional advice. The ratio decidendi and commentary reflect professional editorial interpretations of the Goods and Services Tax Appellate Tribunal's reported judgment. Readers must refer to the full certified order of the Tribunal before initiating or defending litigation.