IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Rajeev Kumar ... Petitioner Vs.

State of Haryana and others ... Respondents

1. The date when the judgment is reserved 27.03.2026 2. The date when the judgment is pronounced 17.04.2026 3. The date when the judgment is uploaded on the website 18.04.2026

4. Whether only operative part of the judgment is Full pronounced or whether the full judgment is pronounced

5. The delay, if any, of the pronoucement of full judgment, Not applicable and reasons thereof CORAM: HON'BLE MR. JUSTICE DEEPAK SIBAL HON'BLE MRS. JUSTICE RAMESH KUMARI Present: Mr. Armaan Cajla, Advocate for the petitioner.

Mr. Sourabh Goel, Senior Standing Counsel for respondents No.2 and 3.

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RAMESH KUMARI, J.

1. The petitioner has filed the instant petition under Article 226/227 of the Constitution of India, praying for issuance of an appropriate writ for quashing of the impugned penalty order issued under Section 123(3) of the CGST Act, 2017/HGST Act, 2017, dated 28.01.2026 (Annexure P-9).

2(i) The case of the petitioner is that the petitioner is running a firm under the name and style of M/s Sulodhia Steels in Mandi Gobindgarh, Punjab and is engaged in the business of trading in iron scrap.

(ii) Vehicle of the petitioner was intercepted on 12.01.2026, when it was transporting goods i.e. M.S Boring Scrap from Chennai to Mandi Gobindgarh. The vehicle had the following documents:-

a) Invoice No. 013 dated 11.12.2025 issued by M/s J.K. Steel, Sadayan, Kuppam, Village Road, Manali, Chennai- 600103 for Rs.9,96,150/-, wherein, IGST and TCS amounting to Rs.1,79,307/- and Rs. 11,755/- has been charged separately. The consignee is Sulodhia Steels Mandi Gobindgarh having GSTN No.

03AIGPK72861FZ6.

b) E-Way Bill No.541022412453 dated 11.12.2025, valid upto 24.12.2025.

c) Updated E-Way Bill No.501938389644 dated 10.01.2026 from Morena, Madhya Pardesh, mentioning therein the same particulars of the invoice and vehicle number and d) Copy of GR No. 2353 dated 13.12.2025 issued by Ramk Multi Model Logistics Limited. The goods were dispatched from Chennai to Mandi Gobindgarh.

(iii) The statement of the driver/person-in-charge of the intercepted vehicle was recorded in Form GST MOV-01.

(iv) On not being satisfied with the documents enclosed, respondent No.3 issued MOV-02 dated 12.01.2026.

(v) Respondent No.3 also issued an order for physical verification/inspection of the conveyance, goods and documents. Physical verification of the goods was also done by respondent No.3 and physical verification report, dated 12.01.2026 was issued.

(vi) Order of detention in Form GST MOV06, dated 15.01.2026 was also issued to the petitioner. However, the eligible copy of the order of detention was never supplied to the petitioner.

(vii) Post order of detention dated 15.01.2026, the petitioner was issued final show cause notice (Annexure P-5) as to why the proposed tax and penalty amounting to Rs.3,58,614/-, should not be payable by him within seven days from the receipt of the notice. The petitioner was directed to appear before respondent No.3 on or before 28.01.2026 at 11 am.

(viii)After issuance of the aforesaid show cause notice, the petitioner duly paid the penalty under protest to get released the vehicle and same was informed to respondent No.3.

(ix) After receipt of the penalty, under protest, respondent No.3 issued release order of the vehicle on 23.01.2026.

(x) After release of the vehicle, the petitioner intimating respondent No.3 through email regarding payment of penalty under protest and reply to the show cause notice.

(xi) Reply vide e-mail to the show cause notice was not considered and no order was passed after receipt of the reply. However, respondent No.3 passed penalty order dated 28.01.2026 confirming the demand of Rs.3,58,614/-.

3. Learned counsel for the petitioner submitted that in spite of having of the valid documents, the vehicle of the petitioner when transporting scrap from Chennai to Mandi Gobindgarh was intercepted and notice dated

22.01.