Orissa High Court Quashes GST Order Communicated on the Eighth Day: Section 129(3) Time Limit Strictly Enforced

Background and Context

The Orissa High Court at Cuttack delivered a significant ruling in K.P. Sugandh Limited Vs Chief Commissioner of CT and GST, Odisha, disposing of W.P.(C) No.31000 of 2024 in favour of the petitioner. The matter revolved around whether an order under Section 129 of the Odisha Goods and Services Tax Act, 2017 was validly passed within the mandatory seven-day window prescribed under Section 129(3), and critically, whether mere internal preparation of an order satisfies that requirement or whether its effective communication to the affected party is also necessary within that period.

This judgment provides important clarity on a procedural question that frequently arises in GST detention and seizure proceedings — the point at which an order is legally deemed to have been "made" for the purposes of statutory timelines.

Facts of the Case

The Detention and Penalty Notice

M/s. K.P. Sugandh Limited had its vehicle detained by GST authorities, following which a penalty notice was served upon the petitioner on 19th September, 2024. Under Section 129(3) of the Odisha Goods and Services Tax Act, 2017, the competent authority was required to pass an order specifying the penalty payable within seven days from the date of service of such notice. Accordingly, the outer limit for passing the order fell on 26th September, 2024.

The Impugned Order

The petitioner challenged an order bearing the date 27th September, 2024, which contained a demand under Section 129 of the Odisha Goods and Services Tax Act, 2017. The core grievance was straightforward — the order had been made on the eighth day from service of the penalty notice, thereby falling outside the statutory period under Section 129(3).

In support of its position, the petitioner also drew the Court's attention to a communication dated 18th October, 2024 issued by the revenue department itself, which explicitly referred to 27th September, 2024 as the date of the impugned order.

Revenue's Counterarguments

The E-mail Communication Defence

The Revenue's Standing Counsel argued that the order had in fact been made on 26th September, 2024, which constituted the seventh day from the date of service of the penalty notice. The Revenue relied on clauses (c) and (d) of sub-section (1) of Section 169 of the Odisha Goods and Services Tax Act, 2017, which provide for the following modes of service:

"169 (c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or
(d) by making it available on the common portal; or"