Gujarat High Court Quashes GST Detention Order: Adjudicating Authority's Failure to Consider Assessee's Reply Proves Fatal
Case Overview
Pacific Cyber Technology Private Limited Vs State of Gujarat & Ors.
Court: Gujarat High Court
Orders Challenged: Detention Order dated 04.06.2025 (Form MOV-06), Demand Order dated 14.06.2025 (Form MOV-09), and Order dated 15.06.2026 (Form DRC-07)
Background of the Dispute
The Gujarat High Court recently adjudicated a writ petition filed by Pacific Cyber Technology Private Limited challenging a chain of orders issued by GST authorities under the goods detention provisions. The core of the dispute revolved around whether the adjudicating authority had applied its mind to the explanation furnished by the assessee before confirming the demand — a fundamental requirement of natural justice and fair adjudication.
The assessee had its goods detained, following which a formal detention order was issued in Form MOV-06 on 04.06.2025. Subsequently, a demand order was passed in Form MOV-09 on 14.06.2025, and this was further followed by an order in Form DRC-07 on 15.06.2026. All three orders were assailed before the High Court by the assessee.
The Assessee's Explanation: What Was Contended
The assessee's case rested on a straightforward factual foundation — that the delay in the movement of goods was entirely attributable to circumstances beyond its control and did not reflect any deliberate attempt to evade compliance.
Key Facts Placed on Record by the Assessee
- The E-way bill was duly generated on 31.05.2025 at approximately 06:00 PM in accordance with the provisions of
Rule 138of the Goods and Services Tax Rules, 2017. - The goods-carrying vehicle was scheduled to commence its journey on Sunday, 1st June 2025.
- However, upon the assessee following up with the transporter regarding the delay, it was communicated that the vehicle had encountered a technical fault and remained in a non-motorable condition throughout 1st June 2025.
- As a direct consequence, the actual movement of the vehicle and goods commenced only on the morning of 2nd June 2025.
- This explanation was comprehensively laid out in paragraph 7 of the reply dated 06.06.2025, submitted by the assessee in response to the detention.
The assessee's Senior Advocate, Mr. Prakash Shah (assisted by Advocate Mr. Dhaval Shah), urged the Court to set aside the demand order on the ground that the adjudicating authority had completely disregarded this explanation while confirming the demand. It was further submitted that the legal position taken by the assessee was supported by several decisions rendered by the Gujarat High Court and other High Courts, all of which had been cited in the reply itself.