Section 129 of the CGST Act, 2017  — Goods in Transit –-- The petitioner sought quashing the impugned order dated 01.04.2022 and the demand dated 02.04.2022. The counsel for the petitioner submitted that the vehicle and the goods were detained by the respondents since the validity of the e-way bill had expired and issued SCN upon the driver. The vehicle was released by this court vide order dated 29.03.2022. On 01.04.2022, the respondent no. 3 had passed an order imposing tax and penalty on the driver of the vehicle, and on the following day the respondent no. 4 issued a demand order in violation of the courts’ order. The court observed that the seller had submitted his prayer on 01.04.2022 to respondent no. 3 to allow him to file a reply to the SCN dated 18.03.2022, but without considering the prayer of the seller, the respondent no. 3 vide order dated 01.04.2022 issued a notice under Section 129(3) imposing tax and penalty upon the driver of the vehicle. As per Section 129(3), the seizing officer has to issue notice specifying the penalty payable. Section 129(4) of the Act says that no penalty can be determined without giving the person concerned an opportunity of being heard. But the respondent no. 3 without giving any opportunity to the petitioner of being heard had passed the impugned order dated 01.04.2022. Despite specific direction passed by this court, the respondent no. 3 caused an assessment imposing tax and penalty under the Act. Even the respondents did not feel it necessary to issue any notice upon the petitioner in terms of the order passed by this court, which act is purely non-compliance of the order passed by this court.

Held that:- The Hon’ble High Court set aside the impugned order dated 01.04.2022 and the demand made by the respondent no. 4 imposing penalty and tax upon the petitioner by its order dated 02.04.2022. However, the respondents are at liberty to initiate steps in accordance with law.