ASP Traders Vs State of Uttar Pradesh & Ors. (Supreme Court of India)
In ASP Traders vs State of Uttar Pradesh & Ors., the Supreme Court considered whether a final order under Section 129(3) of the CGST Act is mandatory after payment of tax and penalty for release of detained goods. The appellant’s goods were detained by a mobile squad for alleged GST contravention and a notice was issued under Section 129(3). The appellant filed objections but, due to business exigencies, paid ₹7.2 lakh in tax and penalty under protest and secured release of goods through Form GST MOV-05. However, the proper officer did not pass a final order under Section 129(3), stating that the matter stood concluded under Section 129(5). The High Court upheld this view. On appeal, the Supreme Court held that mere payment does not dispense with the statutory obligation to issue a reasoned order. The Court emphasized that Section 129(3) mandates a speaking order, especially where objections are raised or payment is made under protest, to preserve the assessee’s statutory right to appeal under Section 107. Rule 142(5) and Circular No. 41/15/2018-GST also require formal orders in Form MOV-09 and uploading of summaries in Form DRC-07. The Court ruled that the deeming fiction in Section 129(5) only precludes further penalty proceedings and does not override the duty to adjudicate disputes. It further clarified that payments made for business necessity should not be presumed as voluntary or a waiver of legal rights, especially when GST systems lack a mechanism to record protest. The officer’s inaction was found inconsistent with statutory and procedural requirements.
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