GSTAT Ernakulam held GST detention order void for breaching seven-day timeline under Section 129(3) for issuing demand after vehicle seizure.
GST Demand Order Void for Breaching Seven-Day Timeline
The GST Appellate Tribunal at Ernakulam ruled that a demand order under Section 129(3) of the CGST Act becomes void if not issued within seven days of goods or vehicle detention. The Tribunal allowed the appeal of GMG Electric, holding the department failed to comply with the mandatory time limit.
The seven-day period is a substantive safeguard to prevent indefinite retention of goods without adjudication. The Tribunal stressed that non-compliance cannot be cured by subsequent proceedings and renders the entire action invalid ab initio.
Section 129(3) sets a strict timeline of seven days for issuing a formal demand notice, failing which the detainee is entitled to immediate release of seized goods.
This ruling strengthens taxpayer protection against prolonged detentions. Practitioners should promptly invoke this timeline in all seizure cases and challenge belated demands as inherently unlawful, regardless of the merits of tax liability.
