TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 288
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....sel appearing on behalf of Sri Akula Vamsi Krishna, learned counsel for the petitioner and Sri R. Kalyan Chakravarthy, learned Government Pleader for Commercial Taxes appearing for the respondents. 3. In all these cases, the officers, appointed under the APGST Act, at various check posts, in the State of Andhra Pradesh, had intercepted consignments, moving in the course of interstate trade from a point of origin, which is outside the State of Andhra Pradesh, to a destination, which is also outside the State of Andhra Pradesh. After such interception, proceedings have been initiated, initially under Section 129 of the GST Act and in some cases, these proceedings were continued under Section 130 of the GST Act. 4. The details of point of origin of the goods, the destination of goods, the dates on which these consignments were intercepted and detained/seized/confiscated and the details relating to the provisions of the GST Act which were invoked are contained in the table set out below: Sl.No. W.P. Number Petitioner Name Origin of Goods Destination of Goods Dates of consignments intercepted and detained/ ceased/ confiscated Provision s of GST Act under which....
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....nts. 6. The contentions raised by the petitioners, in all the aforesaid cases are primarily twofold. Firstly, the State authorities in the State of Andhra Pradesh, have no jurisdiction, to initiate proceedings under Section 129 or section 130, in relation to movement of goods under the IGST Act and secondly, the question of valuation etc., cannot be taken up under Section 129 or 130 7. The first issue that comes up before this Court is whether the officers appointed under the APGST act, can exercise any power under Section 129 or 130 of the APGST Act or CGST Act for intercepting, detaining or confiscating goods, whose movement, falls under the ambit of the IGST Act. 8. Section 129 deals with detention/seizure and release of goods and conveyances in transit. The officer who can detain or seize goods, under this provision is an officer designated and authorized as a "proper officer". Section 130 deals with confiscation of goods or conveyances and levy of penalty. Section 130(2) r/w Section 130(6) and 130(7) makes it clear that the officer who can pass an order of confiscation of goods or conveyances and also levy of penalty is only the "proper officer". The term "proper offi....
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....pplicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act. Section 4. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances. Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify. 10. For a comprehensive view on this issue, it is also necessary to extract, Section 6 of the APGST Act, which reads as follows: Section 6. Authorization of officers of central tax as proper officer in certain circumstances (1) Without prejudice to the provisions of this Act, the officers appointed under the Central Goods and Services Tax Act, 2017 are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government sha....
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....etation, of the above provisions, on the understanding of the GST Council. 13. A plain reading of these provisions, as interpreted by the respondents, would be that any officer, appointed under any Act, is empowered to function as a "proper officer" under any other Act, without any limitation on his power or jurisdiction, unless such limitations are placed by way of notifications. Under this interpretation, an officer, appointed under the CGST Act, or the IGST Act, cannot perform the function of a proper officer under the CGST Act, or the IGST Act, unless he is assigned such a function by the Commissioner in Board. However, an officer, appointed under the APGST Act, can perform the function of "proper officer", under the CGST Act or the IGST Act, in relation to any tax payer, in the State, without any authorization from either the Commissioner in Board, under the Central Act or the Chief Commissioner of the State. Such an interpretation, which confers such unfettered discretion on a State officer, under the Central Act, is clearly not permissible. The scheme, of the GST Acts, does not support this interpretation. 14. The GST regime introduced a new concept of taxation, in ter....
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....mount collected as tax levied by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State. (5) Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. 15. While Article 246A (1) conferred power on the State legislature, to legislate, on taxation of intra state supply of goods and services, Article 246A(2) and Article 269A, conferred exclusive power, to tax interstate supply of goods and services, including import and export supplies, on Parliament. Thus, while both, the state legislatures and Parliament, could simultaneously legislate on taxing supply of goods and services, Parliament alone could tax interstate supply of goods and services. One of the reasons for conferment of such exclusive power is Article 286, of the Constitution, which restricts the power of State legislatures to impose taxes on the sale or purchase of goods, in the course of import or export of goods, out of India. 16. Under this new system of simultaneous....
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....ace, New Delhi Dated: 20 September, 2017 To, All Chief Secretaries of the States/UTs with Legislature/Chairperson, CBEC; All Finance Secretaries/CCTs of the States/UTs with Legislature; All Principal Chief Commissioners/ Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (through Member, GST, CBEC). Sir/Madam, Subject: Guidelines for division of taxpayer base between the Centre and States to ensure Single Interface under GST-regarding Based on the decisions taken in the 9th Meeting of the GST Council held on 16 January, 2017 and 21 Meeting of the GST Council held on 9 September, 2017, the following criteria should be followed for the division of taxpayer base between the Centre and the States to ensure single interface: i. Of the total number of taxpayers below Rs. 1.5 crore turnover, all administrative control over 90% of the taxpayers shall vest with the State tax administration and 10% with the Central tax administration; ii. In respect of the total number of taxpayers above Rs. 1.5 crore turnover, all administrative control shall be divided equally in the ratio of 50% each ....
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....by the said Committees to implement the decision of the GST Council, keeping in view the broad principles stated hereinabove. 4. Suitable notifications regarding cross-empowerment of State and Central Tax officers under CGST/IGST and SGST Acts respectively are being issued separately. Yours faithfully. Shashank Binya (Shashank Priya) 20/9/20 Joint Secretary, GST Council 19. All the tax payers, registered under all the above Acts have been allotted, to either the Centre or the State. Viewed from this angle, the question of whether a taxpayer was allocated to the Centre or to the State would become relevant. Where a taxpayer has been allotted to a State, let us say, Andhra Pradesh, Section 6 of the CGST Act, would cross empower the State officer, assigned the function of a "proper officer" under the APGST Act, in relation to a tax payer, would act as the "proper officer" under the CGST Act also, in relation to that tax payer. Similarly, a state officer, appointed under the APGST Act, in Andhra Pradesh, would be empowered to act as a proper officer, under the IGST Act, for that tax payer. 20. It would also be necessary to place a note of caution. This interpret....
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.... and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;" 93. In construing section 6(2)(a), it is imperative to have due regard to the legislative intent permeating the GST enactments. Section 6, in particular, advances the objective of establishing a unified national market for goods and services and to prevent taxpayers from the undue hardship of being subjected to the rigours of multiple jurisdictions. 94. The provision serves a twofold purpose : first, to insulate taxpayers from the prospect of being proceeded against by more than one authority for the same subject-matter; and secondly, to vest in the officers functioning under the CGST Act, the SGST Act, or the UTGST Act, to render a comprehensive order, thereby avoiding multiplicity of proceedings. Such a construction is also in consonance with the well-recognized principle of comity between jurisdictions, which mandates that coordinate authorities must act with mutual respect and due regard for each other's domain, so as to preclude the possibility of conflicting determinations on the same issue. 95. To give effect to the ab....
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.... 63. Thus, if an assessee has been assigned administratively with the Central Authorities, pursuant to the decision taken by the GST Council as notified by Circular No. 01/2017 bearing Reference F. No. 166/Cross Empowerment/GSTC/2017 dated 20.09.2017, the State Authorities have no jurisdiction to interfere with the assessment proceedings in absence of a corresponding Notification under Section 6 of the respective GST Enactments. 64. Similarly, if an assessee has been assigned to the State Authorities, pursuant to the decision taken by the GST Council as notified by Circular No. 01/2017 bearing Reference F. No. 166/Cross Empowerment/GSTC/2017 dated 20.09.2017, the officers of the Central GST cannot interfere although they may have such intelligence regarding the alleged violation of the Acts and Rules by an assessee. 65. The manner in which the provisions have been designed are to ensure that there is no cross interference by the counterparts. Only exception provided is under Section 6 of the respective GST enactment. Therefore, in absence of a notification for cross-empowerment, the action taken by the respondents are without jurisdiction. Officers under the Sta....
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....ds or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. (2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). (4) No tax, interest or penalty shall be determined under sub-section (3), without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3), shall be deemed to be concluded. (6) Where the person transport....
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.... (4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard. (5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government. (6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession. (7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government. 25. Under Section 129, or Section 130, it is the "proper officer, who has to detain, seize or release the goods and conveyances in transit or confiscate the same. Here a proper officer would be the officer to whom the Commissioner, under the APGST Act, had assigned such function. By the very ....
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....t avail of the said credit within the specified period and thus remains in the integrated tax account after expiry of the due date for furnishing of annual return for such year in which the supply was received, the amount of tax calculated at the rate equivalent to the central tax on similar intra-State supply shall be apportioned to the Central Government. (2) The balance amount of integrated tax remaining in the integrated tax account in respect of the supply for which an apportionment to the Central Government has been done under sub-section (1) shall be apportioned to the,-- (a) State where such supply takes place; and (b) Central Government where such supply takes place in a Union territory: Provided that where the place of such supply made by any taxable person cannot be determined separately, the said balance amount shall be apportioned to,- - (a) each of the States; and (b) Central Government in relation to Union territories, in proportion to the total supplies made by such taxable person to each of such States or Union territories, as the case may be, in a financial year: Provided further that where the taxable person m....
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....ons of a "proper officer", would be recovering the penalty and other sums demanded, under these provisions, as the rightful dues of that State and the Union. In the case of IGST, no part of the taxes are due, to any intermediary state, through which the goods are passing. In such a situation, can the intermediary state, under Section 129 or 130, levy and collect penalties or fines? 29. An illustration is necessary, to understand this situation. There is an inter-state supply of goods, commencing from State A to State C. These goods have to move through State B, to reach State C from State A. The State officer, of State B, exercising powers under Section 129 or 130, seizes and subsequently confiscates the goods moving through State B and auctions the same or the owner of the goods pays a penalty or fine and gets his goods released. In such a case, State B is collecting penalties and fines or appropriating the sale price of the goods, in relation to transactions which are not taxable in State B. It may also be noted that there is no provision, under the GST Acts, for reimbursing the State share of penalty and/or fine, falling to State A or State C, collected by State B. Thus, amou....
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....nsideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that none of the reasons stated in Ext. P2 order justify detention of the goods. There is no provision under the GST Act which mandates that the goods shall not be sold at prices below the MRP declared thereon. Further, there is nothing in Ext. P2 order that shows that, on account of the alleged wrong classification of the goods there was any difference in the rate of tax that was adopted by the assessee. In my view when the statutory scheme of the GST Act is such as to facilitate a free movement of goods, after self assessment by the assessees concerned, the respondents cannot resort to an arbitrary and statutorily unwarranted detention of goods in the course of transportation. Such action on the part of department officers can erode public confidence in the system of tax administration in our country and, as a consequence, the country's economy itself. Under such circumstances, I quash Ext. P2 detention order and direct the respondents to forthwith release the goods belonging to the petitioner on the petitioner producing a copy of this judgment before the said authority.....
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....during transit, the contravention/infringement has to be of the highest degree, such as absence of documents or fake or forged documents, absence of details of dealer, forged e-way bills, a complete deceptive/divergence/mismatch of goods, fake registration, etc. which apparently establishes the 'intention to evade payment of tax'. We may also clarify that the proper officer cannot venture into the assessment and valuation of goods at the time of interception of vehicle, and resort to seizure and confiscation of goods and conveyance by resorting to the entries in portal, and digging out the evasion of tax, etc of third parties. 33. We are in respectful agreement with the above views, that questions of seizure or confiscation, would not arise before a proper officer, under Section 129 or 130, even in the normal course, on grounds of variation in valuation etc., Such powers can be exercised, only if the conditions, set out in the judgment of the Hon'ble High Court of Gujarat, are satisfied. 34. In W.P. No. 3258 of 2026, the respondents had contended that, the petitioner therein was transporting goods, without way bills. We had gone into this issue, in our interlocutory order, da....
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....ney. However, if any discrepancies are found, it would be open to the state officer to forward the said discrepancies to the proper officer of the consignee as well as the consignor. If it is found that, the consignment is not accompanied by necessary way bills, it would be open to the state officer, to presume that the consignment is an intra state supply, unless that presumption is rebutted, 37. Accordingly, it would be appropriate to hold as follows: A. An officer, appointed under the APGST Act, would be cross empowered, to exercise jurisdiction under the CGST or IGST Act, in relation to a tax payer, when such tax payer has been administratively allotted to the State and the State officer is the "proper officer", assigned to discharge the said function, by the Chief Commissioner and vice versa for Central officers. B. A "proper officer' appointed under the APGST Act, and assigned the functions, under section 129 and/or 130, of the APGST Act, can discharge such functions, under the CGST Act also, in relation to intra state sales. C. A "proper officer' appointed under the APGST Act, and assigned the functions, under section 129 and/or 130, of the APGS....