Stp Limited vs. The Deputy State Tax Officer

Facts

The petitioner, STP Limited, filed a writ petition challenging proceedings initiated by the respondent, The Deputy State Tax Officer, in Form GST MOV-07 dated 14.03.2025. The petitioner sought to quash this notice and direct the refund of a penalty amount paid under protest through a DRC-03 challan. The petitioner had paid the penalty under Section 129 of the Goods and Services Tax Act, 2017. The respondent contended that payment of the amount under Section 129(5) of the Act deems all proceedings in respect of the notice under Section 129(3) to be concluded. The Court noted that no final order had been passed pursuant to the impugned notice.

Held

The Court held that since the petitioner had already paid the penalty amount and no final order had been passed pursuant to the impugned notice in Form GST MOV-07 dated 14.03.2025, the respondent was directed to pass a speaking order on merits after hearing the petitioner. The Court reasoned that despite the payment, the absence of a final order warranted further adjudication. The operative direction was for the respondent to pass a speaking order within four weeks. The Court did not explicitly decide on the interpretation of Section 129(5) regarding the conclusion of proceedings upon payment, but rather focused on ensuring a proper adjudication process given the circumstances. The ratio is that even after payment under Section 129, if no final order is passed, the taxpayer has a right to be heard and a speaking order must be issued.

Key Issues

1. Whether the payment of penalty under Section 129 of the Goods and Services Tax Act, 2017, concludes all proceedings related to the notice issued under Section 129(3) of the said Act, as contended by the Revenue. Petitioner's Argument: The petitioner sought to quash the notice and recover the penalty paid under protest, implying a challenge to the conclusion of proceedings or the validity of the initial notice. The petitioner's prayer for refund suggests a belief that the proceedings should not have been concluded or that the payment was made under duress without a final determination. Respondent's Argument: The respondent argued that in terms of Section 129(5) of the Goods and Services Tax Act, 2017, once the amount is paid, all proceedings in respect of the notice specified under Section 129(3) of the Act shall be deemed to be concluded. This contention aims to uphold the finality of the proceedings upon payment.