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Series- 380.

GST Department Did Not Recognize Concept Of 'Working Day' And 'Holiday' In Matters Of Interception, Seizure, Detention

1. Madras HC in the case of M/s. D.K.Enterprises Versus The Assistant /Deputy Commissioner (ST).

2. The Court observed that neither the assessee nor the department could have the luxury of reference to a holiday to delay or protract the proceedings. The acts of interception and retention, though an invasion of the rights of citizens have been accorded statutory sanction in pursuance of the aims and objects of the GST Act.

3. The petitioner contended that there were serious flaws in the procedure followed as neither the order of detention nor the SCN had been issued within the stipulated time. A combined appreciation of the proviso under Section 129(1) and 129(3) makes it apparent that the order of detention is intended to be issued prior to the issuance of the SCN, which, in terms of Section 129(3), must be issued within 7 days from the date of detention/seizure.

4. The department contended that the procedure was within time, arguing that the limitation of 7 days expires on a holiday, 19.08.2022, being Janmashtami. Thus, according to him, excluding 20.08.2022 and 21.08.2022, being Saturday and Sunday, when the GST Department does not function, the notice was liable to be issued only on 22.08.2022.

5. Incidentally, notice has not been issued on August 22, but only on August 24, 2012. Section 129(3) requires a show cause notice to be issued within 7 days of detention or seizure. In an amendment brought to clause 2(e) of Circular dated 13.04.2018 by Circular dated 21.06.2018, the expression 'three working days in the April circular was replaced by the expression 'three days.

6. The court held that the detention is a pre-condition/requisite for the issuance of the SCN and that the order of detention is necessary to be issued prior to the 7th day from the date of the detention/seizure of the conveyance/consignment in question.

7. The procedure that has been followed by the respondents in this matter is contrary to statutory requirements as well as the instructions issued by the Commissioner. The submissions of the revenue, that the circular has no statutory force and the instructions thereunder are to be taken as flexible, are rejected.

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