TaxTMI 
TaxTMI 
2025 (1) TMI 1515
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the petitioner had appointed Sri Bala Vasavi Jewels and Gems, a Coimbatore-based agent (hereinafter called as "Agent"), by virtue of agreement dated 10.12.2012, to procure orders and handle logistics. The said agreement subsist as on date. 2.2 On July 18, 2024, the petitioner sent gold ornaments weighing 11,835.16 grams, valued at Rs.8.37 Crores, to the Agent with returnable delivery challans. The Agent displayed the jewellery across Tamil Nadu, including at M/s. Bhima Jewellery, to solicit feedback before transporting the goods to Chennai. 2.3 Further, he would submit that the only intention of the petitioner was to display the jewellery at exhibition, where the re-sellers will participate and interact with the petitioner, which may possibly result in them placing orders with the petitioner. 2.4 On 25.07.2024, the goods were moved from the Agents to Bhima Jewellery, Madurai, to display the goods and invite them for IIJS Show, which was scheduled to be conducted at Mumbai during the month of August, 2024. 2.5 On July 26, 2024, while returning to Chennai, the transport vehicle was stopped by the local police near Panruti and the gold ornaments were seized. After seizur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt between the petitioner and the agent. b) the petitioner has executed a Jewellers Block Protector Policy ["insurance policy"] with IFFCO-Tokio General Insurance Co.Ltd., from 30.11.2023. However, the Agent does not hold any valid insurance at the time of interception of goods. c) The insurance taken by the petitioner cannot be extended to the agent. d) The Agent has not used the three logistics firms with whom the petitioner has contracts for moving consignments and the agent ought to have moved the consignment only through the three logistics firms and the reason for not doing so are not explained. e) No supporting documents were submitted during detention as well as during enquiry. f) There is no packing list for the goods moved. g) The delivery challans issued by the petitioner were held by Mr. S. Sridharan and Karthick who are staff of the agent. h) The delivery challans do not contain any description of goods, quantity, weight, value, vehicle details, etc. i) The petitioners have not given any evidence of restrictions of usage of seal to show that the ornaments having seal with "MR/MA" belong to the peit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion on the part of the petitioner to evade payment of tax at all and thus no penalty can be levied. xi) The detention of goods will seriously hamper the business prospects of the petitioner. xii) He would also submit that the petitioner is willing to furnish security in accordance with Section 129 (1) (c) of the GST Acts for the release of goods. 2.11 Further, he would contend that Section 129 of the TNGST Act starts with a non-obstante clause and thus, overrides Section 130 of the TNGST Act. 2.12 That apart, in this case, the respondent was supposed to pass orders under Section 129 of the TNGST Act, within a period of 7 days as contemplated in the Act, however, without passing of any such order, the confiscation notice was issued under Section 130 of the Act, which is beyond the scope of the law as well as the Act and Rules. 2.13 Further, he would contend that in this case, there was no sale or supply and the goods were transported for the purpose of showcasing alone and hence, there is no prima facie materials for the purpose of issuance of impugned confiscation notice. He would also contend that the provisions of Section 130 of the TNGST Act may be in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Agent should have been appeared in the "receiver's sign" column in the delivery challan. However, the same is not available. 3.5 Based on these aspects and materials, the officials had arrived at a conclusion that the goods have been transported for the purpose of sale under the pretext of showcasing the gold for the purpose of inviting the buyers for the exhibition, which is scheduled to be held at Mumbai during the month of August, 2024. The suspicion of the Department with regard to the evading of tax stands confirmed with the materials, information and evidences, which were collected during the course of inspection conducted at the business premises of the petitioner by Chennai-01 (Intelligence) Officials on the following aspects: i) During the inspection of Business Place of Tvl. Mukti Gold Private Limited at Chennai no stock of Gold was present. ii) The Business had no cash. The lockers were found to be empty. The tax payer is having more than hundred crores turnover and such a stock/ cash situations is dubious. iii) A notice was displayed outside the Business place that it is closed for 26.07.24 to 29.7.24 for which no valid reason wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 130 of the CGST Act without any prima facie materials or evidences as contended by the petitioner. Hence, prior to the issuance of notice under Section 130 of CGST Act, for confiscation of goods, the Officials were fully satisfied and formed a clear cut opinion that the goods were transported for the purpose of sale with the intention to evade the payment of Tax (GST and Income Tax). Therefore, he requests this Court to dismiss the present petition. 4. I have given due consideration to the submissions made by Mr. Vijay Narayan, learned Senior counsel appearing for the petitioner and Mr. C. Harsha Raj, learned Additional Government Pleader, appearing for the respondent and also perused the materials available on record. 5. It was contended by the learned Senior counsel appearing for the petitioner that the goods were transported to its Agent only for the displaying purpose, so as to invite its customers for Exhibition, which was scheduled to be held at Mumbai in the month of August, 2024. The petitioner has also received an invitation for the said Exhibition on 27.07.2024. 6. In this case, the goods were transported only with the delivery challan. If the goods were tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r and its Agent, it has been categorically mentioned that the goods have to be carried to the Agent only by the employees of the petitioner. However, in the present case, the person, who carried the goods, was not in a position to state anything about the details, under whom he was working, which created suspicion in the minds of the Officials. 12. Further, though a huge quantity of gold worth about 11.990 kg was transported, no details with regard to the description of gold ornaments were available in the delivery challan and merely it was stated as "new gold ornaments 22 Charat HSN Code 71131940". It was also found by the Officials that there was a little different in the quantity of gold as mentioned in the invoice and as per the report of the Government Officials. 13. Immediately, the Goods Detention Notice was issued on 26.07.2024 along with the Form GST MOV 02, Form GST MOV-06 and Form GST MOV-07. In such case, the petitioner ought to have proved the veracity of their statements, that their real intention is only to showcase the gold to their customers, by way of filing a detailed reply along with appropriate documents. However, no such reply has been filed and no docum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation, i.e., the non-obstante clause available in Section 129 would be applicable only for the seizure. In other words, if there is any provision contained in the Act with regard to the seizure in any other manner, Section 129 will supersede over the same. Therefore, as far as confiscation is concerned, the said non- obstante clause available in Section 129 will not supersede the provisions of Section 130, since Section 129 only talks about the seizure of the goods and not about confiscation. Thus, both these Sections are independent in nature. 21. In the judgment of Synergy Fertichem, it has been held that any opinion of the authority to be formed is not subject to objective test. The purpose of invoking Section 130 of the Act at the very threshold, the authorities need to make out a very strong case. Merely on suspicion, the authorities may not be justified in invoking Section 130 of the Act straightway. In this case, the officials had formed clear cut prima facie opinion to make out a very strong case in their favour for issuing notice under Section 130 of the TNGST Act. 22. In Anant Jignesh Shah case, the show cause notice was issued on an assumption that the driver of t....