Mandatory MOV-09 Issuance: Allahabad High Court Upholds Assessee’s Right to Appeal
In a significant ruling, the Hon’ble Allahabad High Court has declared that the GST Department must issue a penalty order in Form GST MOV-09, even if the assessee has already paid the penalty “under protest” to secure the release of detained goods. This decision, from the case of Aries Agro Ltd. v. State of Uttar Pradesh [Writ Tax No. 1790 of 2025 dated April 30, 2025], underscores that failing to issue MOV-09 violates an assessee’s fundamental right to appeal.
The Case in Brief:
M/s Aries Agro Limited, the petitioner, had their vehicle and goods detained by the Revenue Department. To expedite the release, they paid the penalty under protest, formally recorded in Form GST DRC-03 on September 14, 2024.
Despite this payment, the Department didn’t issue any further order. Aries Agro Limited then requested the issuance of Form GST MOV-09, but their application was rejected on November 28, 2024. The Department’s rationale was that since the amount had already been deposited, an MOV-09 order was unnecessary.
Aries Agro Limited argued that paying “under protest” entitled them to a formal order, allowing them to challenge its validity. They contended that the non-issuance of MOV-09 unfairly deprived them of their right to appeal. The Department, however, maintained that GST procedures don’t require MOV-09 once payment is made and goods are released.
The Court’s Ruling:
The Allahabad High Court sided with Aries Agro Limited. It observed that the penalty was indeed paid under protest. The court firmly stated that authorities cannot avoid issuing a penalty order in Form GST MOV-09, even if the payment wasn’t explicitly under protest. Without this formal order, parties are deprived of their right to challenge the Department’s actions and file an appeal.
Consequently, the Court quashed the Impugned Order and instructed the Respondent to issue the MOV-09 order within three weeks.
Why This Matters:
This judgment is a crucial win for transparency and the right to due process in GST matters. Section 129 of the CGST Act, 2017, outlines the procedure for detention and release of goods, and Section 129(3) specifically requires the issuance of a notice and a subsequent penalty order. Furthermore, Circular No. 41/15/2018-GST dated April 13, 2018, clarifies that the MOV-09 order should be uploaded to the common portal, and the demand reflected in the electronic liability register even after payment.
This ruling makes it clear: paying a penalty, especially under protest, does not exempt the GST Department from issuing the mandatory Form GST MOV-09. This form is essential for an assessee to exercise their legal right to appeal the penalty, ensuring fairness and accountability in the system.