Sasi Pathirakunnath vs Assistant State Tax Officer ...
2023 Latest Caselaw 1127 Ker

                 IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                     PRESENT
                  THE HONOURABLE MR. JUSTICE GOPINATH P.
       WEDNESDAY, THE 18TH DAY OF JANUARY 2023 / 28TH POUSHA, 1944
                           WP(C) NO. 31445 OF 2022
PETITIONER/S:
     1     SASI PATHIRAKUNNATH, AGED 55 YEARS
           SASI PATHIRAKUNNATH, PROPRIETOR,
           A ONE GOLD, TC-26/289-1,
           MYLIPADAM, CHEMBUKKAVU P O;
           THRISSUR DISTRICT., PIN - 680020
     2     NIKHIL SURESH ,AGED 20 YEARS
           NIKHIL SURESH, S/O. SURESH T V,
           AGED 20, RESIDING AT THIRUVAMBADY HOUSE,
           KEERAMKULAGARA, THRISSUR ., PIN - 680005
           BY ADV TOMSON T.EMMANUEL


RESPONDENT/S:
     1     ASSISTANT STATE TAX OFFICER (INTELLIGENCE)
           ASSISTANT STATE TAX OFFICER (INTELLIGENCE),
           STATE GOODS & SERVICES TAX DEPARTMENT,
           SQUAD NO.1, EDAPPALLY, COCHIN ., PIN - 682024
     2     STATE TAX OFFICER (INTELLIGENCE)
           STATE TAX OFFICER (INTELLIGENCE),
           STATE GOODS & SERVICES TAX DEPARTMENT,
           SQUAD NO.1, EDAPPALLY, COCHIN ., PIN - 682024
     3     RAILWAY PROTECTION FORCE
           RAILWAY PROTECTION FORCE,
           ERNAKULAM SOUTH RAILWAY STATION, COCHIN ,
           REPRESENTED BY ITS CIRCLE INSPECTOR., PIN - 682016
     4     STATE OF KERALA,
           STATE GOODS & SERVICES TAX DEPARTMENT,
           SECRETARIAT, THIRUVANANTHAPURAM ., PIN - 695001
     5     COMMISSIONER (GST), GOVERNMENT OF INDIA, MINISTRY OF
           FINANCE, DEPARTMENT OF REVENUE,
           CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
           GST POLICY WING, NEW DELHI., PIN - 110001
     6     CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS
           CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS,
           MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW
           DELHI ., PIN - 110001


               ADV. THUSHARA JAMES (SR GP)
THIS    WRIT    PETITION   (CIVIL)   HAVING    COME   UP   FOR   ADMISSION   ON
18.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 31445 OF 2022                    2




                                JUDGMENT

The first petitioner is stated to be the proprietor of an

establishment known as 'A One Gold', having its place of

business at Chembukavu in Thrissur district. The 2 nd petitioner

is an acquaintance of the 1st petitioner. The 2nd petitioner was

travelling on a train from Thrissur to Alleppy on 07.09.2022. He

was carrying some gold ornaments from Thrissur to Alleppy, at

the instance of the 1st petitioner.

2. The 2nd petitioner was detained at about 02.35 pm by

the officials of the Railway Protection Force (RPF). On being

questioned as to the documents available with the 2 nd petitioner

for carrying the gold, he is stated to have shown certain

documents on his mobile phone, which did not appear

satisfactory to the Railway Protection Force. Thereafter, by

about 05.55 pm, the 1st petitioner reportedly brought certain

documents, which according to the 1st petitioner were sufficient

to establish that the gold was being bona fide transported with

full compliance of the GST laws. The railway police, however,

entrusted the matter with the GST Department. It is the case of

the petitioners that, by the time, the GST officials had

intercepted the goods, the goods were having every document

necessary to prove that they were being transported in full

compliance with the GST laws. It is submitted that

notwithstanding the above and completely ignoring the

documents available with the petitioners, the 2 nd respondent

initiated and concluded proceedings under Section 130 of the

CGST/SGST Acts as per Ext.P18, which is under challenge in

this writ petition.

3. It is the case of the learned counsel appearing for the

petitioners that there was absolutely no warrant for initiation,

continuation and conclusion of proceedings under Section 130

of the CGST/SGST Acts and therefore, Ext.P18 order is

completely without jurisdiction. It is submitted that when the

goods in question were supported by valid documents, the

action of the officers in initiating and concluding proceedings

under Section 130 of the CGST/SGST Acts was completely

unwarranted and without jurisdiction.

4. Learned Senior Government Pleader would submit

that even if it were to be assumed that the interception can only

be with respect to the time at with the notices under the

CGST/SGST Acts were issued (05.55 pm on 07.09.2022), the

proceedings initiated and concluded against the petitioners

under Section 130 of the CGST/SGST Acts cannot be said to be

vitiated in any manner. It is submitted that immediately after

the RPF had intercepted the goods, the goods were subject

matter of physical verification and the physical verification

report suggests that the quantity of gold ornaments recovered

from the 2nd petitioner had a total weight of 724.99 gms

whereas the labour invoice and other documents produced to

substantiate that the goods were being transported in a bona

fide manner, showed that the total quantity was approximately

825 gms. It is submitted that this discrepancy itself is sufficient

to prove that the proceedings under Section 130 of the

CGST/SGST Acts was completely warranted as there was clear

attempt to evade payment of tax. It is submitted that the

subsequent explanation offered by the 2 nd petitioner that he had

forgotten to handover about 100 gms of gold, which he was

carrying in his pocket, is nothing but an afterthought and is an

attempt to ensure that the quantity of goods seized by the

railway police and which was subsequently the subject matter of

proceedings under the CGST/SGST Acts, completely tallys with

the documents stated to have been produced later by the 1 st

petitioner before the authorities. It is submitted that the there

is nothing to show that the discrepancy was not on account of

any illegal sale during the course of carriage.

5. Learned counsel appearing for the petitioners, in

reply, would submit that when the goods were completely

covered by documents, the mere fact that there was some

discrepancy in the total quantity is no ground to initiate

proceedings under Section 130 of the CGST/SGST Acts. He

refers to the provision of Section 130 of the CGST/SGST Acts

and submits that proceedings under Section 130 of the

CGST/SGST Acts could have been initiated only if there was a

wilful attempt to evade the payment of tax. It is submitted that

even if the entire case of the GST Department is accepted, there

is nothing to show that there was any attempt to evade the

payment of any tax rightly due to the Government. It is

submitted that the proceedings are therefore liable to be

quashed.

6. I have considered the contentions raised. The

undisputed facts of the case are that the 2 nd petitioner was

carrying certain gold ornaments in a train from Thrissur to

Alleppy. He was initially intercepted by the officials attached to

the Railway Protection Force and the 2 nd petitioner was able to

only shown certain documents on his mobile phone, which

according to the petitioners, suggest that the gold ornaments

were being carried in a valid manner and in accordance with all

the requirements of the CGST/SGST Acts and the Rules made

thereunder. It is also not disputed before me that, by the time,

the State GST officers got involved in the matter, the 1 st

petitioner had produced certain documents, which according to

the petitioners, are sufficient to carry gold in the manner

carried by the 2nd petitioner. However, there is no satisfactory

explanation for the fact that there was a discrepancy in the

quantity mentioned in the documents produced by the 1 st

petitioner in the evening before the Tax authorities and the

quantity actually recovered from the petitioner. The contention

of the learned counsel appearing for the petitioners that the 2 nd

petitioner had forgotten to hand over about 100 gms of gold,

which was being carried in his pocket, cannot be accepted, at

least at this stage. The fact that there was discrepancy in the

quantity in the documents stated to have been produced and the

quantity recovered from the 2nd petitioner itself, in my opinion,

is sufficient for the Department to suspect the evasion of tax. I

do not propose to find anything on merits regarding the order of

adjudication issued by the 2nd respondent under Section 130 of

the CGST/SGST Acts for the reason that it would not be proper

to do so, considering the fact that the petitioners have appellate

remedies against Ext.P18 order. Therefore, this question is

being considered only for the purpose of deciding whether the

officers were right in initiating proceedings under Section 130

of the CGST/SGST Acts. In the totality of the facts and

circumstances of the case, I am unable to find that there was

any malice or ill-will or lack of jurisdiction in initiating

proceedings under Section 130 of the CGST/SGST Acts. I make

it clear that I have not found that Ext.P18 order is valid on its

merits and it will be open to the petitioners to raise all their

contentions before the appellate authority in a duly constituted

appeal.

The writ petition is therefore dismissed, without

interfering with Ext.P18 order and holding that it will be open

to the petitioners to raise all their contentions before the

appellate authority. On such appeal being filed, the appellate

authority shall consider the matter untrammeled by any

observations contained in this judgment. If the petitioners file

an appeal within a period of two weeks from today, the period

from 11.10.2022 (date of issuance of Ext.P18 order) till today

(18.01.2023) shall be excluded for the purposes of determining

any period of limitation within which such appeal had to be

filed.

sd/-

ajt                                         GOPINATH P.,
                                              JUDGE





                      APPENDIX OF WP(C) 31445/2022


PETITIONER EXHIBITS
Exhibit P1             TRUE COPY OF REGISTRATION CERTIFICATE DATED

17.07.2018 ISSUED TO 1ST PETITIONER UNDER THE GST ACT 2017.

Exhibit P2 TRUE COPIES OF FORM GSTR-1 FILED UNDER ONLINE PORTAL OF GST DEPARTMENT FOR APRIL TO AUGUST OF 2022.

Exhibit P3 TRUE COPY OF LABOUR INVOICE NO.J55 DATED 07.09.2022 ISSUED BY 1ST PETITIONER TO ADHIPARASKTHI BANGLE WORKS, ALAPPUZHA.

Exhibit P4 TRUE COPY OF LABOUR INVOICE NO.J56 DATED 07.09.2022 ISSUED BY 1ST PETITIONER TO BROTHERS JEWELLERS, AMBALAPPUZHA.

Exhibit P5 TRUE COPY OF LABOUR INVOICE NO.J57 DATED 07.09.2022 ISSUED BY 1ST PETITIONER TO ADHIPARASKTHI BANGLE WORKS, ALAPPUZHA.

Exhibit P6 TRUE COPY OF FORM GST MOV- 02, GST MOV-04, AND GST MOV-06 DATED 07.09.2022 ISSUED TO 2ND PETITIONER AT 5.55 PM BY 1ST RESPONDENT, IN DETAINING THE GOODS U/S.129(1) OF GST ACT. Exhibit P7 TRUE COPY OF STATEMENT DATED 08.09.2022 SENT TO 1ST RESPONDENT BY 2ND PETITIONER.

Exhibit P8 TRUE COPY OF LETTER DATED 08.09.2022 SENT TO 1ST RESPONDENT BY 1ST PETITIONER, ALONG WITH ORIGINAL OF EXT-P3 TO P6 LABOUR INVOICES.

Exhibit P9 TRUE COPY OF LETTER DATED 12.09.2022 SUBMITTED BY 1ST PETITIONER BEFORE 1ST RESPONDENT.

Exhibit P10 TRUE COPY OF LETTER DATED 12.09.2022 SUBMITTED BY 2ND PETITIONER BEFORE 1ST RESPONDENT.

Exhibit P11 TRUE COPY OF NOTICE DATED 14.09.2022, HAVING

DIN320620220001031 ISSUED U/S.130 OF THE GST ACT ISSUED BY 2ND RESPONDENT TO PETITIONERS IN PROPOSING TO DEMAND PENALTY AND FINE, IN LIEU OF CONFISCATION.

Exhibit 12 TRUE COPY OF REPLY DATED 26.09.2022 SENT TO 2ND RESPONDENT AGAINST EXT-P11 NOTICE.

Exhibit P13 TRUE COPY OF CIRCULAR NO.17/2018 DATED 29.06.2018 ISSUED BY PRINCIPAL SECRETARY & COMMISSIONER OF KERALA SGST DEPARTMENT.

Exhibit P14 TRUE COPY OF DOCUMENT IDENTIFICATION NUMBER DETAILS TO DIN320920220001031.

Exhibit P15 TRUE COPY OF ORDER DATED 23.09.2020 ISSUED BY 4TH RESPONDENT IN SANCTIONING REWARD SCHEME FOR INFORMANTS AND GOVERNMENT EMPLOYEES. Exhibit P16 TRUE COPY OF INTERIM ORDER DATED 06.10.2022 PASSED BY THIS HON'BLE COURT FOR COMPLETING ADJUDICATION.

Exhibit P17 TRUE COPY OF SUBMISSION MADE BY PETITIONERS BEFORE 2ND RESPONDENT, AT THE TIME OF APPEARANCE FOR ADJUDICATION, IN PRODUCING BOOKS OF ACCOUNTS.

Exhibit P18 TRUE COPY OF ORDER DATED 11.10.2022 PASSED BY 2ND RESPONDENT, IN CONFIRMING THE PROPOSAL CONTAINED IN EXT-P11.