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M/s ASP Traders v. State of U.P.

Civil Appeal · 2025 INSC 890Decided 24 Jul 2025
C.A. No.-009764-009764 - 2025 (arising from SLP(C) No. 17995 of 2022)
Justice J.B. Pardiwala · Justice R. Mahadevan

Background

ASP Traders, a registered Arecanut dealer, had its goods-carrying truck detained by a UP GST Mobile Squad over a shortfall of missing bags and suspicion that the consignee was non-existent. To get its goods released quickly, the trader deposited the demanded IGST amount, but the tax officer never passed a formal, reasoned order under Section 129(3) of the CGST Act despite repeated requests. The Allahabad High Court dismissed the trader's writ petition, holding that once payment was made, the proceedings stood "concluded" under Section 129(5) and no order or mandamus was required.

Decision Breakdown

The Supreme Court held that even where a taxpayer pays the demanded tax/penalty to secure release of detained goods, the proper officer remains statutorily bound to pass a reasoned final order under Section 129(3) in Form GST MOV-09 and upload the corresponding summary in Form GST DRC-07. The Court reasoned that "deemed conclusion" of proceedings under Section 129(5) does not dispense with the adjudication requirement, because a reasoned order is essential to preserve the taxpayer's statutory right of appeal under Section 107 and to satisfy Article 265 of the Constitution (no tax without authority of law). It set aside the High Court's order and directed the officer to pass a reasoned order within one month, after which the trader can pursue appellate remedies.

Lesson Learnt

Paying a GST demand under protest to get your goods released does not waive your right to a formal, reasoned order from the tax authority: that order is what preserves your ability to appeal, and authorities cannot skip it just because payment was made.

Official source (sci.gov.in)View Judgment (PDF)

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