Demand order under Section 129(3) passed 175 days after statutory deadline is barred by limitation and without jurisdiction; vehicles ordered released: Calcutta High Court

The Court held that the seven-day time limit under Section 129(3) for passing the demand order after service of notice is clear and definite, and a pending proceeding elsewhere does not stop the statutory period from running unless a competent court has ordered so.

The Calcutta High Court has set aside two demand orders under Section 129(3) imposing penalties aggregating Rs. 25,23,240 and ordered release of two goods vehicles detained since July 2025, holding that the orders passed on 15.01.2026 — 175 days after the statutory deadline of 24.07.2025 — were barred by limitation and without jurisdiction [Permender Singh v. Union of India & Ors].

Justice Aryak Dutt, relying upon the Division Bench rulings of the Patna High Court in Kedia Enterprises v. State of Bihar, the Gujarat High Court in Khatu Enterprises v. State of Gujarat, and the Tripura High Court in Satguru Impex v. State of Tripura, held that Section 129(3) prescribes two-time limits: the notice must issue within seven days of detention, and the order must then be passed within seven days of service of the notice. The notices were served on 17.07.2025, making 24.07.2025 the deadline.

The demand orders stated that the delay was owing to the matter being "sub-judice" before the Gauhati High Court. The Court rejected this ground — the Gauhati proceedings were brought by the supplier regarding registration cancellation; the petitioner was not a party; no stay order was passed on the Section 129 proceedings; and the statutory period had already expired before the Gauhati proceedings commenced. A pending proceeding elsewhere does not stop a statutory period from running unless a competent court has so ordered.

The Court also rejected the alternative-remedy objection, holding that where the impugned order is passed without jurisdiction, relegating the petitioner to a statutory appeal would serve no purpose. The petitioner was the vehicle owner with no role in preparing invoices or e-way bills, and the vehicles — his only source of livelihood — had been detained for over a year.

2026-juristway.com-2981-HC(Calcutta)-GST  |  High Court of Calcutta  |  WPA No. 3350 of 2026  |  14.10.2026