M/S Asp Traders vs. State Of Uttar Pradesh & Ors.

Held

The Court held that the proper officer was under a clear statutory obligation to pass a final order under Section 129(3) in Form GST MOV-09 and DRC-07, especially since objections were filed, payment was made under protest due to business exigencies, and the appellant sought to challenge the levy. The refusal by the High Court to direct the passing of such an order was found to frustrate the appellant's statutory right to appeal and was contrary to established legal principles of tax adjudication and procedural fairness. The Court clarified that Section 129(5), which states proceedings are deemed concluded upon payment, cannot be interpreted to mean the assessee waives the right to challenge the levy. The term 'conclusion' in Section 129(5) signifies no further prosecution proceedings, not an abandonment of the right to adjudication. The proper officer is duty-bound to pass a formal order to enable the taxpayer to avail the appeal remedy. The Court emphasized that an appeal can only lie against an 'order,' and the absence of a reasoned order deprives the taxpayer of this remedy, undermining fairness and due process. The Court directed respondent no. 3 to pass a reasoned final order under Section 129(3) of the CGST Act, 2017, in Form GST MOV-09, after granting an opportunity of being heard, and upload the summary in Form GST DRC-07 within one month.

Facts

M/s ASP Traders (the appellant) had a consignment detained by the Mobile Squad for alleged contraventions under the IGST/CGST/SGST Act, 2017. A notice under Section 129(3) was issued. The appellant filed objections and, due to business exigencies, paid the tax and penalty amounting to Rs. 7,20,440/- via Form GST DRC-03. The goods were released by passing a discharge order in Form GST MOV-05. However, no formal order under Section 129(3) was passed. The appellant requested such an order to pursue statutory remedies, but the authorities stated that Section 129(5) dispensed with this requirement. The appellant's writ petition was dismissed by the High Court.

Key Issues

1. Whether, upon payment of tax and penalty under Section 129(3) of the CGST Act, 2017, the proper officer is mandatorily required to pass a final order, or if Section 129(5) dispenses with this requirement. Petitioner's arguments: The appellant contended that despite payment made under protest due to business exigencies, a formal, reasoned order under Section 129(3) was necessary to enable them to pursue their statutory right to appeal under Section 107. They argued that the payment made via Form GST DRC-03, which automatically classifies it as voluntary, did not absolve the proper officer of their duty to adjudicate and pass a speaking order, especially when objections were filed. They relied on the principle that tax collection must be by the authority of law (Article 265 of the Constitution) and that procedural fairness requires a reasoned order to facilitate appeals. Revenue's arguments: The respondent authorities argued, and the High Court held, that Section 129(5) of the CGST Act, 2017, deemed proceedings concluded upon payment of tax and penalty, thereby dispensing with the need for a final order.