Kerala High Court
Salim P.A vs State Of Kerala on 28 January, 2025
Author: Bechu Kurian Thomas
Bench: Bechu Kurian Thomas
W.P.(C) No.3411/25 1
2025:KER:6830
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
TUESDAY, THE 28TH DAY OF JANUARY 2025 / 8TH MAGHA, 1946
WP(C) NO. 3411 OF 2025
PETITIONER:
SALIM P.A
AGED 52 YEARS, SON OF ABDUL JABBAR
PROPRIETOR M/S.ORIENTAL METALS
JAMEELA BUILDING, DANAPPADY,
KAYAMKULAM ROAD, VANDIKAPPALLY BUS STOP,
MUTHUKULM, ALAPPUZHA
RESIDING AT PUTHENPEEDIKAYIL,
MUDIKKAL P.O., PERUMBAVOOR,
ERNAKULAM, PIN - 690506
BY ADVS.
DR.K.P.PRADEEP
SRI.T.T.BIJU
SMT.T.THASMI
SMT.M.J.ANOOPA
SMT.POOJA V.M.
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY ITS SECRETARY TO THE GOVERNMENT,
TAXES DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, PIN - 695001
2 COMMISSIONER OF GST, KERALA
KERALA GOODS AND SERVICE TAX DEPARTMENT,
GOVERNMENT OF KERALA,
TAX TOWERS, KARAMANA
THIRUVANANTHAPURAM, PIN - 695002
3 ENFORCEMENT OFFICER/ STATE TAX OFFICER,
ENFORCEMENT SQUAD NO 2, ERNAKULAM
KERALA STATE GOODS AND SERVICE TAX DEPARTMENT,
W.P.(C) No.3411/25 2
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SECOND FLOOR, SGST COMPLEX,
PERUMANOOR P.O., ERNAKULAM, PIN - 682015
4 ASSISTANT ENFORCEMENT OFFICER
ENFORCEMENT SQUAD NO 2, ERNAKULAM,
KERALA STATE GOODS AND SERVICE TAX DEPARTMENT,
SECOND FLOOR, SGST COMPLEX,
PERUMANOOR P.O., ERNAKULAM, PIN - 682015
BY SMT.JASMIN M.M., GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
28.01.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No.3411/25 3
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BECHU KURIAN THOMAS, J.
--------------------------------
W.P.(C) No.3411 of 2025
---------------------------------
Dated this the 28th day of January, 2025
JUDGMENT
Petitioner challenges the proceedings initiated under section 129(1) and
section 130 of the Central Goods and Services Tax Act, 2017/State Goods
and Services Tax Act, 2017 (hereinafter referred to as 'the GST Act' for short).
Petitioner also seeks for a declaration that the notices issued under section
130 of the GST Act are illegal apart from a direction for release of the
consignment and conveyance detained.
2. Petitioner runs a proprietary concern in scrap materials under the
name 'M/s Oriental Metals'. Petitioner alleges that he purchases scrap
materials from different registered persons and supplies it to his customers.
While so, on 11.01.2025, a consignment, which is purported to have been
supported by relevant documents, while being transported from
Muthalakulam to Kanjikode at Palakkad, was intercepted by the third
respondent and on noticing certain suspicious circumstances, the goods and
the conveyance were detained.
3. After verification, an order of detention dated 18.01.2025 was issued
under section 129(1) of the GST Act alleging that the goods were being
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transported without valid documents. Thereafter, a notice was issued under
section 130 of the GST Act directing the petitioner to submit his explanation.
4. Petitioner filed a reply stating that the goods under detention were
covered by valid documents including tax invoice and an e-way bill, both
dated 10.01.2025. A hearing was also conducted on 24.01.2025 and orders
are awaited. In the meanwhile, this writ petition has been filed challenging the
proceedings, contending that the detention and consequent notice for
confiscation are contrary to law and also that the respondents are misusing
the authority conferred upon them under section 130 of the GST Act.
According to the petitioner, there is no reason to invoke section 130 of the
GST Act and no evasion of tax had even been detected. Petitioner pleads
that it cannot even be imputed that the goods under transport were not
covered by valid documents.
5. I have heard Dr.Pradeep K.P., learned counsel for the petitioner as
well as Smt.Jasmin M.M., learned Government Pleader.
6. Petitioner is challenging an order of detention issued under section
129(1) as well as a notice of confiscation issued under section 130 of the
GST Act. A perusal of Ext.P6 notice for confiscation indicates that a prima
facie satisfaction has been recorded in the notice that M/s. Oriental Metals,
which is a proprietary concern of the petitioner, had colluded with fraudulent
entities with bogus GST registrations and received bogus invoices without
actual receipt of goods. It is also stated that the goods were being transported
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with a view to evade tax and defraud the Government exchequer. Ext.P6
notice also specifically refer to the modus operandi for tax evasion being
practiced by the petitioner and even alleges that the enquiry revealed the
involvement of other entities who fabricated bogus documents. It is on the
basis of the above prima facie satisfaction that Ext.P6 notice was issued,
specifically observing that the transportation of goods by the supplier in the
instant case was with an intention to evade payment of tax. This prima facie
satisfaction by the enforcement officer is sufficient to initiate proceedings
under section 130 of the GST Act.
7. As the statutory scheme itself provides for release of goods pending
adjudication, petitioner cannot, at this juncture, avoid adjudication of the
proceedings initiated under section 130 of the GST Act. If the goods are
required to be released, the statute provides a mechanism by payment of the
fine in lieu of confiscation of the goods or conveyance even at the per-
adjudication stage. If the petitioner does not want release at that stage, then,
even after the adjudication, such an opportunity is available. However, as the
basic requirement for initiating proceedings under section 130 of the GST Act
is specifically mentioned in the notice for confiscation, I am of the view that
circumstances do not warrant exercise of jurisdiction under Article 226 of the
Constitution of India.
8. Apart from the above, concededly, adjudication proceeding under
section 130 of GST Act is about to be completed, with hearing having taken
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place on 24-01-2025. The proceedings initiated under section 129(1) of the
GST Act also cannot be said to be invalid since the petitioner had failed to
tender the required documents for enabling the goods in movement. In such a
scenario, there is no circumstance warranting any interference under Article
226 of the Constitution of India. Petitioner has to seek recourse to the
statutory remedies.
Hence, reserving the liberty of the petitioner to pursue the statutory
remedies, this writ petition is dismissed.
Sd/-
BECHU KURIAN THOMAS
JUDGE
vps
2025:KER:6830
APPENDIX OF WP(C) 3411/2025
PETITIONER'S/S' EXHIBITS
Exhibit P1 TRUE COPY OF THE REGISTRATION CERTIFICATE
DATED 10-09-2024
Exhibit P1(a) TRUE COPY OF THE MODIFIED CERTIFICATE DATED
7-12-2024
Exhibit P2 TRUE COPY OF THE FORM GST MOV 01 DATED
11-01-2025 ISSUED BY THE 4TH RESPONDENT
Exhibit P3 TRUE COPY OF THE ORDER FOR PHYSICAL
VERIFICATION IN FORM GST MOV 02 DATED
18-01-2025 ISSUED BY THE 3RD RESPONDENT
Exhibit P4 TRUE COPY OF THE VERIFICATION REPORT IN FORM
GST MOV 04 DATED 11-01-2025
Exhibit P5 TRUE COPY OF THE ORDER OF DETENTION DATED
18-01-2025 ISSUED BY THE 3RD RESPONDENT
Exhibit P6 TRUE COPY OF THE NOTICE DATED 18-01-2025
Exhibit P7 TRUE COPY OF THE TAX INVOICE DATED 10-01-2025
Exhibit P8 TRUE COPY OF THE E WAY BILL DATED 10-01-2025
Exhibit P9 TRUE COPY OF THE REPLY DATED 24-01-2025
SUBMITTED ON 24-01-2025
Exhibit P10 TRUE COPY OF THE NOTICE DATED 24-01-2025
ISSUED UNDER SECTION 70
Exhibit P11 TRUE COPY OF THE BANK STATEMENT DATED
24-1-2025 OF PETITIONER WITH ESAF SMALL
FINANCE BANK
