SASI PATHIRAKUNNATH and NIKHIL SURESH VS ASSISTANT STATE TAX OFFICER (INTELLIGENCE)

The first petitioner is the owner of ‘A One Gold’, a business located in Chembukavu, Thrissur district. The second petitioner, an acquaintance of the first, was traveling by train from Thrissur to Alleppy on September 7, 2022. He was carrying gold ornaments on behalf of the first petitioner.

At approximately 2:35 PM, officials from the Railway Protection Force (RPF) detained the second petitioner. Upon being asked for documentation proving the legitimacy of the gold he was transporting, the second petitioner presented certain documents on his mobile phone. However, these documents did not satisfy the RPF officials. Later, around 5:55 PM, the first petitioner arrived with additional documents, claiming they were adequate to demonstrate that the gold was being transported lawfully and in full compliance with the Goods and Services Tax (GST) regulations.

Despite the first petitioner’s assurances, the RPF handed the case over to the GST Department for further verification. The petitioners argue that by the time the GST officials took over the matter, it had already been delayed significantly.

The first petitioner is the owner of ‘A One Gold,’ a business located in Chembukavu, Thrissur district. The second petitioner is an acquaintance of the first petitioner and was traveling on a train from Thrissur to Alleppy on September 7, 2022, carrying gold ornaments for the first petitioner.

At approximately 2:35 pm, the Railway Protection Force (RPF) detained the second petitioner. When asked to present documents verifying the transport of the gold, the second petitioner provided documents on his mobile phone, which the RPF found unsatisfactory. Around 5:55 pm, the first petitioner arrived with additional documents, claiming they were sufficient to demonstrate that the gold was being transported in full compliance with GST laws. Despite this, the railway police referred the matter to the GST Department.

The petitioners argue that by the time GST officials intercepted the gold, all necessary documentation proving compliance with GST laws was available. However, ignoring these documents, the second respondent initiated and concluded proceedings under Section 130 of the CGST/SGST Acts, resulting in Ext.P18, which the petitioners are challenging in this writ petition.

The petitioners’ counsel contends that there was no justification for initiating, continuing, and concluding proceedings under Section 130 of the CGST/SGST Acts, making the Ext.P18 order invalid and beyond jurisdiction. They argue that since the goods were supported by valid documents, the officers’ actions under Section 130 were unwarranted and without jurisdiction.

The learned Senior Government Pleader argues that the interception should be considered valid based on the timing of the notices issued under the CGST/SGST Acts at 5:55 pm on September 7, 2022.

The case involves two petitioners, the first being the proprietor of an establishment called ‘A One Gold’ located in Chembukavu, Thrissur district, and the second being an acquaintance of the first petitioner. On September 7, 2022, the second petitioner was traveling by train from Thrissur to Alleppy, carrying gold ornaments at the request of the first petitioner.

During the journey, the Railway Protection Force (RPF) detained the second petitioner at around 2:35 pm. Upon being questioned about the documents for the gold, he presented some on his mobile phone, which the RPF found unsatisfactory. Later, at around 5:55 pm, the first petitioner arrived with additional documents, which he claimed were sufficient to prove that the gold was being transported in compliance with GST laws. Despite this, the railway police handed the matter over to the GST Department. The petitioners claim that at the time of GST officials’ interception, they had all the necessary documents to prove compliance with GST laws. However, the second respondent proceeded with actions under Section 130 of the CGST/SGST Acts, culminating in the issuance of order Ext.P18, which is now being challenged in the writ petition.

The petitioners argue through their counsel that there was no basis for the initiation, continuation, and conclusion of proceedings under Section 130 of the CGST/SGST Acts, rendering Ext.P18 jurisdictionally flawed. They assert that the goods were backed by valid documents, making the actions of the officials under the mentioned section completely unwarranted.

In contrast, the Senior Government Pleader contends that even assuming the interception is timed with the notices under the CGST/SGST Acts issued at 5:55 pm on September 7, 2022, the proceedings against the petitioners under Section 130 are justified. It was noted that upon physical verification by the RPF, the gold ornaments carried by the second petitioner weighed 724.99 grams, whereas the documents produced indicated approximately 825 grams. This discrepancy is cited as evidence of an attempt to evade tax, justifying the proceedings under Section 130 of the CGST/SGST Acts. The explanation by the second petitioner about forgetting to hand over about 100 grams of gold, carried in his pocket, is dismissed as an afterthought, allegedly aimed at aligning the seized gold quantity with the documents provided later by the first petitioner.

The contention centers on the validity of the proceedings initiated under the CGST/SGST Acts based on the discrepancy in the gold’s weight and the legitimacy of the documents presented.

The case involves two petitioners related to an incident of transporting gold ornaments by train. The first petitioner, proprietor of ‘A One Gold’ in Thrissur, and the second petitioner, an acquaintance, were involved in the transportation of the gold from Thrissur to Alleppey on September 7, 2022. The second petitioner was detained by the Railway Protection Force (RPF) at 2:35 pm. When asked for documents to prove the legitimacy of the gold transport, he provided some documents via his mobile phone, which the RPF found unsatisfactory. By 5:55 pm, the first petitioner arrived with additional documents, claiming they proved compliance with GST laws.

Despite these documents, the RPF handed over the case to the GST Department. The petitioners argue that the goods had all necessary documentation to show compliance with GST regulations at the time of interception. However, the GST officials proceeded with actions under Section 130 of the CGST/SGST Acts, concluding the matter with Ext.P18, which the petitioners are challenging in this writ petition.

The petitioners’ counsel contends that there was no justification for the initiation, continuation, and conclusion of proceedings under Section 130, arguing that the goods were accompanied by valid documents. The counsel claims that the proceedings under Section 130, which pertains to the confiscation of goods for evading tax, were initiated without jurisdiction and were unnecessary since the documents were in order.

The Senior Government Pleader argued that the interception and subsequent proceedings were justified. They noted a discrepancy in the gold’s weight: the physical verification found 724.99 grams, while the documents showed approximately 825 grams. This discrepancy suggested a potential attempt to evade tax. The plea that the second petitioner forgot to hand over 100 grams of gold carried in his pocket was dismissed as an afterthought.

In response, the petitioners’ counsel emphasized that a mere discrepancy in weight, when the goods were covered by valid documents, should not trigger proceedings under Section 130. They argued that Section 130 requires evidence of a willful attempt to evade tax, which was not present in this case. Thus, they requested the quashing of the proceedings.

After considering the arguments, the court noted the undisputed fact that the second petitioner was transporting gold ornaments by train and was intercepted by the RPF. The core of the issue was whether the discrepancy in the gold’s weight justified the initiation of proceedings under Section 130 of the CGST/SGST Acts.

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