Under the CGST Act, 2017, whether, upon payment of tax and penalty by the appellant within the time stipulated in the notice under Section 129(3), the proper officer is still mandatorily required to pass a final order under Section 129(3), or whether the deeming fiction under Section 129(5) dispenses with such requirement?
Coram: R. Mahadevan; J.B. Pardiwala
No, the deeming fiction does not dispense with adjudication. Payment of tax and penalty under Section 129(3) to secure release of detained goods does not by itself satisfy the requirement of adjudication. Section 129(5) concludes only proceedings for prosecution; the proper officer remains statutorily bound to pass a reasoned final order, since Section 129(3) requires the officer to issue a notice "and thereafter, pass an order".
Central Goods and Services Tax Act, 2017 — s.129(3), s.129(5) — CGST Rules, 2017 — Rule 142(5) — Detention and release of goods in transit — Mandatory adjudication order — Central Goods and Services Tax Act, 2017 — s.129(3), s.129(5) — Deeming fiction on payment — Adjudication remains mandatory — Held: Payment of tax and penalty under Section 129(3) to secure release of detained goods does not by itself conclude adjudication of the show cause notice. The deeming fiction in Section 129(5) concludes only proceedings for prosecution; it does not excuse the proper officer from passing a reasoned order under Section 129(3). (¶14) Central Goods and Services Tax Act, 2017 — s.129(3) — Payment under protest — No waiver of right to object — Held further: Payment made under protest, with objections already filed, cannot be treated as a voluntary waiver or abandonment of the right to challenge the levy. Once objections are on record, adjudication by a speaking order is not optional but imperative. (¶15) CGST Rules, 2017 — Rule 142(5) — Form GST MOV-09 — Right of appeal under s.107 — Held further: The proper officer must pass a formal order in Form GST MOV-09 and upload its summary in Form GST DRC-07, since an appeal under Section 107 lies only against an order and the High Court's refusal to direct one frustrated the appellant's statutory right of appeal. The impugned order is set aside and a reasoned order is directed within one month. (¶20, 21)
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