Sudhish P.P vs State Tax Officer
2021 Latest Caselaw 16329 Ker

Citation : 2021 Latest Caselaw 16329 Ker
Judgement Date : 4 August, 2021

Kerala High Court

Sudhish P.P vs State Tax Officer on 4 August, 2021

                IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
                  THE HONOURABLE MR. JUSTICE A.M.BADAR
     WEDNESDAY, THE 4TH DAY OF AUGUST 2021 / 13TH SRAVANA, 1943
                         WP(C) NO. 15566 OF 2021
PETITIONER/S:

           SUDHISH P.P.,AGED 41 YEARS, PLAVINKOOTTATHIL HOUSE,
           PADUKADU, VIYYUR.P.O, THRISSUR-680010.

           BY ADVS.
           P.S.SOMAN
           T.RADHAMONY



RESPONDENT/S:

     1     STATE TAX OFFICER, SQUAD NO.VII, STATE GOODS AND SERVICE
           TAX DEPARTMENT,TAX COMPLEX, PALAKKAD-678001.

     2     THE STATE OF KERALA
           REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT,GOVT.
           SECRETARIAT,THIRUVANANTHAPURAM-695001.

     3     THE COMMISSIONER OF STATE TAX ,
           STATE GOODS AND SERVICE TAX DEPARTMENT, TAX TOWER,
           KARAMANA.P.O,
           THIRUVANANTHAPURAM-695002.

           SMT. DR.THUSHARA JAMES, SENIOR GOVERNMENT PLEADER




     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
04.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 15566 OF 2021                 2



                                 JUDGMENT

Heard both sides.

2. Learned counsel appearing for the petitioner submits that the

petitioner is a goldsmith by profession and he used to take orders

from the jewellers for the purpose of manufacturing the gold

ornaments on labour charge basis. It is further submitted that the

petitioner wanted to display some ornaments to the jewellers for

soliciting orders and accordingly went to Palakkad for obtaining job

works from jewellers. He carried with him different types of gold

ornaments for the purpose of display and demonstration to the

jewellers. However, the 1st respondent inspected the bag carried by

the petitioner and the petitioner instantaneously disclosed that the

bag contains 233.540 gms of gold ornaments carried by the

petitioner for the purpose of displaying and not for sale.

3. Learned counsel appearing for the petitioner further

submitted that the respondent straight away issued notice in the

form of GST MOV-10 for confiscation of the goods and levy of penalty

under Section 130 of the Central Goods and Service Tax Act, 2017.

Learned counsel appearing for the petitioner urged that this Court

has held that straight away no action under Section 130 of the GST

Act can be taken and for initiating such action, there must be an

element of mens rea. It is further submitted that even Hon'ble

Gujarat High Court has held that mere suspicion is not sufficient to

initiate action under Section 130 of the GST Act. It is submitted that

the quantity of gold is a small quantity and respondents have not

rebutted the contention of the petitioner that the articles were for the

purpose of demo and display.

4. Learned Senior Government Pleader drew my attention to the

provisions of Section 130 of the CGST Act as well as Rule 138A of the

CGST Rules, 2017. She submitted that the matter rests only at the

stage of show cause notice and all these contentions can be raised by

the petitioner before the concerned officer. On merits, the learned

Senior Government Pleader submitted that the petitioner was not

carrying any valid document in support of the material found to be

transported by him.

5. I have considered the submissions so advanced and perused

the impugned communication at Ext.P1. It is merely a notice in the

Form of GST MOV-10. Paragraph No.7 of the said notice reads thus:-

'' 7. You are hereby directed to show cause, within seven days from the receipt of this notice, as to why the goods in question and the conveyance used to transport such goods shall not be confiscated under the provisions of section 130 of the Central Goods and Services Tax Act or the integrated Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, 2017 and why the tax, penalty and other charges payable in respect of such goods and the conveyance shall not be

payable by you.''

It is thus clear that the petitioner is only required to show cause

within seven days of the notice as to why action under Section 130 of

the CGST Act should not be taken against the petitioner. Section 130

of the CGST Act, 2017 contemplates opportunity of hearing in order

to decide whether the goods are required to be confiscated or not.

No doubt, while taking action under Section 130 of the said Act, the

proper officer is enjoined with the duty to come to the conclusion that

the act on the part of the petitioner is only with an intent to avoid

payment of tax, but that has to be decided by the proper officer on

consideration of the entire materials before him and that too, after

hearing the petitioner.

6. In this view of the matter, the petitioner has to approach

the proper officer for making his stand clear and to seek audience

before him. Writ Court cannot give its own finding without there

being any finding by the proper officer in the light of the show cause

notice and reply thereto by the affected person.

The petition as such is premature and the same is accordingly