TaxTMI 
TaxTMI 
Detention and Confiscation of Inter-State Consignments: Territorial Limits on State GST Officers - Jurisdiction under Sections 129 and 130
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....een administrative cross-empowerment and jurisdiction over a particular inter-State transaction. It holds that a State officer cannot invoke Sections 129 or 130 of the IGST Act in relation to an inter-State sale that both originates and culminates outside that State. The officer may verify documents at the point of interception and communicate discrepancies to the proper officers of the consignor and consignee, but cannot retain the consignment or commence coercive proceedings under those provisions merely because the goods are passing through the State. The ruling is significant because it treats territorial nexus, statutory assignment of functions and the fiscal architecture for apportionment of integrated tax as cumulative constraints upon enforcement jurisdiction. It also separates a transit verification function from the power to adjudicate, penalise or confiscate. Legal & Statutory Context Constitutional allocation of taxing power Article 246A of the Constitution of India establishes the dual GST legislative structure. While clause (1) confers power upon Parliament and, subject to clause (2), State Legislatures to make laws with respect to GST, clause (2) reserves....
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.... transit "in contravention of the provisions of this Act or the rules made thereunder." Detention or seizure must be preceded by service of an order of detention or seizure. The provision also requires the proper officer to issue notice and afford the affected person an opportunity of hearing before determination. Section 130 of the Central Goods and Services Tax Act, 2017 is confiscatory. Its principal triggers include supplying or receiving goods in contravention of the Act or rules "with intent to evade payment of tax", failure to account for goods liable to tax, supply without registration where registration is required, and use of a conveyance for carriage in contravention of the Act or rules. Confiscation results in vesting of title in the Government under Section 130(5). Section 130(4) preserves the requirement of hearing, while Section 130(2) requires that the owner be offered an option to pay fine in lieu of confiscation, subject to the statutory limits. The proceedings in question therefore require not only a proper officer and a statutory contravention, but also jurisdiction over the relevant supply and, for confiscation, satisfaction of the more exacting statutory....
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....his arrangement lies in identifying the authority competent to administer a taxpayer through the cross-empowerment structure. Accordingly, a State officer becomes competent under the CGST or IGST framework only where two conditions coexist: the taxpayer is administratively allotted to that State and the officer has been assigned the particular statutory function. The converse applies to Central officers. This is a functional and taxpayer-linked conception of cross-empowerment, rather than a geographically unlimited power arising from the mere location of goods. Transit checking is not equivalent to adjudicatory jurisdiction Sections 129 and 130 necessarily contemplate a proper officer. Yet the ruling recognises that an officer stationed at a check post cannot know the nature of a consignment before stopping the vehicle and verifying the records. A limited initial verification is therefore not impermissible. The legal consequence follows upon verification: when the documents show that the supply is inter-State and that its origin and destination are both outside the intercepting State, the vehicle must ordinarily be allowed to continue its journey. This distinction prese....
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.... that element is expressly stipulated. The distinction becomes decisive when action is proposed on allegations of undervaluation, valuation mismatch or broader assessment concerns. A transit officer cannot use detention or confiscation proceedings as a substitute for a detailed valuation assessment where the documents otherwise identify the goods and transaction. Judicial / Administrative Perspective The principal jurisdictional holding In 2026 (4) TMI 288 - ANDHRA PRADESH HIGH COURT, the Court set aside proceedings under Sections 129 and 130 initiated against consignments that originated outside the State and were destined outside the State. The Court held that a State proper officer assigned functions under Sections 129 and 130 may exercise those functions under the IGST Act only where the State is entitled to a share of tax under Section 17 in relation to that transaction. Where the State is solely an intervening transit State, the officer has no jurisdiction to detain, seize or confiscate under the IGST Act. Apparent discrepancies may instead be forwarded to the proper officers of the consignor and consignee. Support for the transit-jurisdiction principle The app....
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....nquiry under Sections 4, 17 and 20 of the IGST Act. An officer may be assigned an interception function for an area, but the ultimate exercise of detention or confiscation jurisdiction over an IGST supply remains subject to the statutory nexus identified in the ruling. Implications & Observations • For a consignment moving between two States through a third State, the first question is whether the intercepting State has any entitlement to allocation under Section 17 of the IGST Act. If it is only a transit State, proceedings under Sections 129 and 130 of the IGST Act cannot be initiated by its State officers. • Administrative allocation and assignment of the statutory function remain essential. Cross-empowerment is not a general warrant enabling every State officer to exercise every CGST or IGST power against every taxpayer. • Transporters and taxpayers should maintain and promptly produce the prescribed invoice, bill of supply or delivery challan and e-way bill. Documentary compliance helps establish the inter-State character of the transaction at the initial verification stage. • Where an officer identifies a disc....