Reasoned adjudication remains mandatory under GST detention proceedings despite payment under protest before release.

Payment of the demanded tax, penalty or fine under GST detention and confiscation proceedings does not by itself dispense with the statutory duty to pass a reasoned adjudication order. The proper officer must consider the reply to the show cause notice and give an opportunity of personal hearing before concluding proceedings under the detention provisions. Where the release order merely records payment and release of goods and conveyance without a speaking decision on the notice, the omission is inconsistent with fairness in quasi-judicial action and deprives the person of an effective statutory remedy. The penalty order was set aside, and a fresh reasoned order was directed after hearing.

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Issues: Whether a penalty order passed under the GST detention and confiscation provisions could be sustained when the show cause notice was not followed by a reasoned adjudication order despite payment of the demanded amount under protest, and whether the proper officer was still bound to decide the reply and grant hearing before concluding the proceedings.

Analysis: The release order merely recorded payment of tax, penalty and fine and the release of the goods and conveyance, but it did not show that the show cause notice had been adjudicated or that the proceedings had been concluded by a reasoned order. Payment of the demanded amount did not dispense with the statutory duty to pass a speaking order. The reply to the show cause notice had to be considered, and the affected person had to be given an opportunity of personal hearing before a fresh decision under the detention provisions. The omission deprived the petitioner of the effective statutory remedy and was inconsistent with the requirement of fairness in quasi-judicial proceedings.

Conclusion: The penalty order was set aside. The proper officer was directed to pass a fresh reasoned order under Section 129(3) of the CGST Act, 2017 after granting personal hearing under Section 129(4) of the CGST Act, 2017 and to complete the consequential formalities within the prescribed time.

Ratio Decidendi: Payment of the demanded tax or penalty under the GST detention provisions does not absolve the proper officer from passing a reasoned adjudication order after considering the reply and granting hearing.

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