Andhra Pradesh High Court – Amravati
Golden Traders vs Special Secretary 1Had Considered The … on 1 April, 2026
Author: R Raghunandan Rao
Bench: R Raghunandan Rao
1
RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
***
WRIT PETITION NOs: 541, 1756, 3097, 3225, 3227, 3252, 3254, 3258 and
3354 of 2026
W.P.No.541 of 2026
Between:
1. GOLDEN TRADERS, 17/691 A, MUTHOORE, CHANGARAMKULAM,
NORTH END, ANILATHMAJA HOUSING SOCIETY, MALAPPURAM,
KERALA, 679585, REPRESENTED BY ITS PARTNER SHRI.
BIJEESH P V, C/O. MOHANAN, AGED ABOUT 40 YEARS, R/O.
PONNANI, MALLAPURAM, KERALA- 679585
2. M/S FM TRADING, 16/952,953, CHANGARAMKULAM NARANIPUZHA
ROAD, CHANGARAMKULAM JUNCTION, ALANKOD,
MALAPPURAM, KERALA, 679585, REPRESENTED BY ITS
PARTNER SHRI. MOHANAN P V , AGED ABOUT 60 YEARS, R/O.
PATTERIVALAPPI, KANHIYUR, MOOKUTHALA, MALAPPURAM,
KERALA, 679574
3. SRI P ABDUL ASKAR, DRIVER OF THE VEHICLE S/O P HAMZA,
AGED ABOUT 48 YEARS, R/O PANKUZHI VEEDU HOUSE,
EDAPPALAM POST, PATTAMBI, PALAKKAD, KERALA-679308 DL
NO KL5219980000314 VEHICLE NUMBER KA07B4979
…PETITIONER(S)
AND
$1. THE DEPUTY ASSISTANT COMMISSIONER OF STATE TAX, C/O
THE ASSISTANT COMMISSIONER OF STATE TAX, GUNTAKAL
CIRCLE, ANANTHAPURAMU DIVISION, ANANTHAPURAMU,
ANDHRA PRADESH- 515801
2. STATE OF ANDHRA PRADESH, REPRESENTED BY ITS
PRINCIPAL SECRETARY, REVENUE DEPARTMENT,
COMMERCIAL TAXES A P SECRETARIAT, VELEGAPUDI – 522 503
…RESPONDENT(S):
2
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchDate of Judgment pronounced on : 01-03-2026
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
1. Whether Reporters of Local newspapers : Yes/No
May be allowed to see the judgments?
2. Whether the copies of judgment may be marked : Yes/No
to Law Reporters/Journals:
3. Whether the Lordship wishes to see the fair copy : Yes/No
of the Judgment?
3
RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
*IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
* THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
*THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
+ WRIT PETITION NOs: 541, 1756, 3097, 3225, 3227, 3252, 3254, 3258 and
3354 of 2026
% Dated: 01-04-2026
Between:
1. GOLDEN TRADERS, 17/691 A, MUTHOORE, CHANGARAMKULAM,
NORTH END, ANILATHMAJA HOUSING SOCIETY, MALAPPURAM,
KERALA, 679585, REPRESENTED BY ITS PARTNER SHRI.
BIJEESH P V, C/O. MOHANAN, AGED ABOUT 40 YEARS, R/O.
PONNANI, MALLAPURAM, KERALA- 679585
2. M/S FM TRADING, 16/952,953, CHANGARAMKULAM NARANIPUZHA
ROAD, CHANGARAMKULAM JUNCTION, ALANKOD,
MALAPPURAM, KERALA, 679585, REPRESENTED BY ITS
PARTNER SHRI. MOHANAN P V , AGED ABOUT 60 YEARS, R/O.
PATTERIVALAPPI, KANHIYUR, MOOKUTHALA, MALAPPURAM,
KERALA, 679574
3. SRI P ABDUL ASKAR, DRIVER OF THE VEHICLE S/O P HAMZA,
AGED ABOUT 48 YEARS, R/O PANKUZHI VEEDU HOUSE,
EDAPPALAM POST, PATTAMBI, PALAKKAD, KERALA-679308 DL
NO KL5219980000314 VEHICLE NUMBER KA07B4979
…PETITIONER(S)
AND
$1. THE DEPUTY ASSISTANT COMMISSIONER OF STATE TAX, C/O
THE ASSISTANT COMMISSIONER OF STATE TAX, GUNTAKAL
CIRCLE, ANANTHAPURAMU DIVISION, ANANTHAPURAMU,
ANDHRA PRADESH- 515801
2. STATE OF ANDHRA PRADESH, REPRESENTED BY ITS
PRINCIPAL SECRETARY, REVENUE DEPARTMENT,
4
RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
COMMERCIAL TAXES A P SECRETARIAT, VELEGAPUDI – 522 503
…RESPONDENT(S):
! Counsel for the Petitioner :Sri P. Girish Kumar, Sri V.
Raghuraman, Sri M.V.J.K. Kumar, Sri
Pasupuleti Venkata Prasad, learned
counsel for the petitioner and Sri
Sameer Gupta, learned counsel
appearing on behalf of Sri Akula Vamsi
Krishna, learned counsel for the
petitioner. and^Counsel for Respondents : Sri R. Kalyan Chakravarthy, learned
Government Pleader for Commercial
Taxes<GIST :
>HEAD NOTE:
? Cases referred:
1
2024 (16) CENTAX 509 (MAD)
2
2020 (34) G.S.T.L. 142
3
2020 (38) GSTL 317
4
2025 (12) TMI 941
5
2024 (84) GSTL 181 (All.)
5
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchAPHC010004772026
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3529]
(Special Original Jurisdiction)WEDNESDAY,THE FIRST DAY OF APRIL
TWO THOUSAND AND TWENTY SIX
PRESENT
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
WRIT PETITION NOs: 541, 1756, 3097, 3225, 3227, 3252, 3254, 3258 and
3354 of 2026W.P.No.541 of 2026
Between:
1. GOLDEN TRADERS, 17/691 A, MUTHOORE, CHANGARAMKULAM,
NORTH END, ANILATHMAJA HOUSING SOCIETY, MALAPPURAM,
KERALA, 679585, REPRESENTED BY ITS PARTNER SHRI.
BIJEESH P V, C/O. MOHANAN, AGED ABOUT 40 YEARS, R/O.
PONNANI, MALLAPURAM, KERALA- 679585
2. M/S FM TRADING, 16/952,953, CHANGARAMKULAM NARANIPUZHA
ROAD, CHANGARAMKULAM JUNCTION, ALANKOD,
MALAPPURAM, KERALA, 679585, REPRESENTED BY ITS
PARTNER SHRI. MOHANAN P V , AGED ABOUT 60 YEARS, R/O.
PATTERIVALAPPI, KANHIYUR, MOOKUTHALA, MALAPPURAM,
KERALA, 679574
3. SRI P ABDUL ASKAR, DRIVER OF THE VEHICLE S/O P HAMZA,
AGED ABOUT 48 YEARS, R/O PANKUZHI VEEDU HOUSE,
EDAPPALAM POST, PATTAMBI, PALAKKAD, KERALA-679308 DL
NO KL5219980000314 VEHICLE NUMBER KA07B4979
…PETITIONER(S)
AND
6
RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
1. THE DEPUTY ASSISTANT COMMISSIONER OF STATE TAX, C/O
THE ASSISTANT COMMISSIONER OF STATE TAX, GUNTAKAL
CIRCLE, ANANTHAPURAMU DIVISION, ANANTHAPURAMU,
ANDHRA PRADESH- 515801
2. STATE OF ANDHRA PRADESH, REPRESENTED BY ITS PRINCIPAL
SECRETARY, REVENUE DEPARTMENT, COMMERCIAL TAXES A P
SECRETARIAT, VELEGAPUDI – 522 503
…RESPONDENT(S):
Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be
pleased toPleased to issue an appropriate writ, order or direction, more
particularly a Writ of Mandamus, setting-aside the impugned order in Form
GST MOV-11 bearing Reference No. DIN3730122552633 dated 30-12-2025,
passed by Respondent No.1 under the provisions of the CGST/APGST Act,
2017, as being void, arbitrary, illegal, without jurisdiction and without authority
of law, apart from being violative of Articles 14 19(1)(g) and 265 of the
Constitution of India, and consequently direct Respondent No.1 to forthwith
release the detained goods and conveyance, without insisting on any fine,
penalty or security, and to passIA NO: 1 OF 2026
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased
pleased to direct release of the conveyance, there being no independent
allegation or notice against the vehicle owner and passIA NO: 2 OF 2026
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased
Pleased to direct immediate release of the goods under detention,
considering that the goods are perishable agricultural produce, and continued
detention would result in irreversible loss. deterioration in quality, and
destruction of commercial value, and passIA NO: 3 OF 2026
Petition under Section 151 CPC praying that in the circumstances stated
in the affidavit filed in support of the petition, the High Court may be pleased
7
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchpleased to stay operation of the impugned order in Form GST DRC 07
bearing Ref. No. ZD371025006307R dated 13.10.2025 and passCounsel for the Petitioner(S):
1. PASUPULETI VENKATA PRASAD
Counsel for the Respondent(S):
1. GP FOR COMMERCIAL TAX
Date of Reserved :16.02.2026
Date of Pronouncement :01.04.2026
Date of Upload :01.04.2026
8
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchThe Court made the following common order:
(per Hon’ble Sri Justice R.Raghunandan Rao)
As all these Writ Petitions raise a similar question of law, they are
being disposed of, by way of this common order.
2. Heard Sri P. Girish Kumar, Sri V. Raghuraman, Sri M.V.J.K.
Kumar, Sri Pasupuleti Venkata Prasad, learned counsel for the petitioner and
Sri Sameer Gupta, learned counsel 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:
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RRR,J& TCDS,J
W.P.No.541 of 2026 & batchDates of
consignme Provision
S nts s of GST Reason
Origin
l. W.P Petitioner Destination intercepted Act under for
of
N Number Name of Goods and which the detentio
Goods
o. detained/ goods n
ceased/ seized
confiscatedDate of
Interception
–
18/12/2025 Valuation
WP 541 GOLDEN Section and
1 Kerala Delhi
of 2026 TRADERS Date of 130 Quantific
order of ation
Confiscation
30/12/2025
Date of
Interception
-
17/12/2025 Valuation
M/S T.M.
WP 1756 Karnat Section and
2 ENTERPRISE Maharashtra
of 2026 aka Date of 130 Quantific
S
order of ation
Confiscation
02/01/2026
Date of
Interception
-
02/01/2026
Sections
WP 3097 AL BADAR
3 Kerala Maharashtra 129 and Valuation
of 2026 SPICES Date of
130
order of
Confiscation
06/01/2026
Date of
Interception
-
12/01/2026
WP 3225 M/S R.G Maharashtra Section
4 Kerala Valuation
of 2026 TRADERS (Nagpur) 130
Date of
order of
Confiscation
21/01/2026
10
RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
Date of
Interception
-
12/01/2026
WP 3227 M/S. SHIVA Maharashtra Section
5 Kerala Valuation
of 2026 TRADERS (Nagpur) 129
Date of
order of
Confiscation
19/01/2026
Date of
Interception
-
16/11/2025
Date of
WP 3252 Karnat order of Section
6 IQBAL DEEN Delhi Valuation
of 2026 aka Confiscation 130
10/12/2025
Date of
Appeal
Order -
23/01/2026
Date of
Interception
-
18/11/2025
Date of
WP 3254 Karnat order of Section
7 B J KUMAR Delhi Valuation
of 2026 aka Confiscation 130
10/12/2025
Date of
Appeal
Order
23/01/2026
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RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
Date of
Interception
-
18/11/2025
Date of
WP 3258 MR. SURESH Karnat order of Section
8 Delhi Valuation
of 2026 KUMAR aka Confiscation 130
01/12/2025
Date of
Appeal
Order
23/01/2026
Date of
Interception
Absence
-
of
M/S. 06/11/2025
WP 3354 Karnat Section invoices
9 SREEKRISHN Delhi
of 2026 aka 130 and
A TRADERS Date of
EWAY
order of
bills
Confiscation
14/12/2025
5. In all these cases, it is an admitted fact, that the said goods were
accompanied by all the necessary documents, set out under Section 68 of the
GST Act, 2017, except in W.P.No.3258 of 2026. However, the goods were
intercepted and proceedings, under Section 129 or 130 of the GST Act, were
initiated and continued, on the ground that the goods were grossly
undervalued or on the ground that the goods do not match the description set
out in the accompanying documents, or on the ground that the quantum of
goods intercepted, was far higher than the quantum set out in the
accompanying documents.
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RRR,J& TCDS,J
W.P.No.541 of 2026 & batch
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 officer‖ is
defined, in Section 2(91), of the APGST Act, in the following terms:
―Section 2. Definitions:-
(91) “proper officer” in relation to any function to be
performed under this Act, means the Chief Commissioner
or the officer of the State tax who is assigned that function
by the Chief Commissioner;‖
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W.P.No.541 of 2026 & batch
9. Any officer, assigned a function by the Chief Commissioner,
would be a proper officer in relation to such function. This would also mean
that a proper officer, assigned by the Chief Commissioner, under the APGST
Act, would have jurisdiction to perform the function, assigned to him, only in
terms of the APGST Act. Assignment of function, by the Chief Commissioner,
under the APGST Act, would not empower such an officer to act under either
the CGST Act or under the IGST Act. However, section 6 of the CGST Act, as
well as Section 4 of the IGST Act, provides for cross empowerment to an
officer appointed under the APGST Act, to act as a ―proper officer‖ under the
CGST Act also. These provisions are extracted below:
Section 6. Authorisation of officers of State tax or Union territory
tax as proper officer in certain circumstances.
(1) 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
conditions as the Government shall, on the recommendations of
the Council, by notification, specify.
(2) Subject to the conditions specified in the notification issued
under sub-section (1),–
(a) where any proper officer issues an order under this
Act, he shall also issue an order under the State Goods
and Services Tax Act or the Union Territory Goods and
Services Tax Act, as authorised by the State Goods and
Services Tax Act or the Union Territory Goods and
Services Tax Act, as the case may be, under intimation to
the jurisdictional officer of State tax or Union territory tax;
(b) where a proper officer under the State Goods and
Services Tax Act or the Union Territory Goods and
Services Tax Act has initiated any proceedings on a
subject matter, no proceedings shall be initiated by the
proper officer under this Act on the same subject matter.
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W.P.No.541 of 2026 & batch
(3) Any proceedings for rectification, appeal and revision, wherever
applicable, 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 shall, on the recommendations of the Council,
by notification, specify.
(2) Subject to the conditions specified in the notification
issued under sub-section (1),-
(a) where any proper officer issues an order under
this Act, he shall also issue an order under the
Central Goods and Services Tax Act, 2017 as
authorised by the said Act under intimation to the
jurisdictional officer of central tax; (Act No.12 of
2017).
(b) where a proper officer under the Central Goods
and Services Tax Act, 2017 has initiated any
proceedings on a subject matter, no proceedings
shall be initiated by the proper officer under this Act
on the same subject matter. (Act No.12 of 2017).
(3) Any proceedings for rectification, appeal and revision,
wherever applicable, of any order passed by an officer
15
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchappointed under this Act, shall not lie before an officer
appointed under the Central Goods and Services Tax Act,
2017. (Act No.12 of 2017).
11. The respondents seek to interpret this provision to mean that an
officer, appointed under the APGST Act, can function as ―proper officer‖ under
the CGST Act or IGST Act, and his functioning as ―proper officer‖ can be
subjected to such restrictions, that the Central Government, on the
recommendations of the council, by notification, may specify. The
interpretation, of the petitioners, is that, no officer, appointed under the
APGST Act, can perform the functions of a ―proper officer‖ under the CGST
Act or the IGST Act, unless a notification is issued by the Central Government,
setting out the functions that can be performed by an officer appointed under
the APGST Act and the conditions, subject to which the State Officer is to
function.
12. The learned Counsel for the petitioners sought to rely upon the
notifications, circulars and clarifications, issued by the Central Board, to
contend that even the Central Board had understood, that section 6 of the
CGST and APGST Acts, do not cross empower officers and such cross
empowerment has to be conferred by separate notifications. The learned
Government Pleader has pointed out to the subsequent clarifications issued,
by the authorities, to the effect that no further notifications are necessary, to
cross empower officers. This court cannot interpret a provision of law, on the
basis of the understanding of the executive and as such this court is not
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W.P.No.541 of 2026 & batch
basing it’s interpretation, 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 terms
of the lists contained in Schedule VII of the Constitution of India. Prior to the
introduction of the GST regime, the power to tax, barring certain duties like
stamp duty, was granted, either under the Union List or the State list,
exclusively to the States or the Union. However, the GST regime created a
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W.P.No.541 of 2026 & batch
system of simultaneous taxation, wherein both the Union and the States are
taxing the same transactions of supply of goods or services or both. The
introduction of this system required an amendment to the Constitution. This
amendment introduced Articles 246A and 269A, which read as follows:
246A. Special provision with respect to goods and services tax —
(1) Notwithstanding anything contained in articles 246 and 254,
Parliament, and, subject to clause (2), the Legislature of every State,
have power to make laws with respect to goods and services tax
imposed by the Union or by such State.
(2) Parliament has exclusive power to make laws with respect to goods
and services tax where the supply of goods, or of services, or both takes
place in the course of inter-State trade or commerce.
Explanation.–The provisions of this article, shall, in respect of goods
and services tax referred to in clause (5) of article 279A, take effect from
the date recommended by the Goods and Services Tax Council
269A. Levy and collection of goods and services tax in course of inter-
State trade or commerce.–
(1) Goods and services tax on supplies in the course of inter-State trade
or commerce shall be levied and collected by the Government of India
and such tax shall be apportioned between the Union and the States in
the manner as may be provided by Parliament by law on the
recommendations of the Goods and Services Tax Council.
Explanation.–For the purposes of this clause, supply of goods, or of
services, or both in the course of import into the territory of India shall be
deemed to be supply of goods, or of services, or both in the course of
inter- State trade or commerce.
(2) The amount apportioned to a State under clause (1) shall not form
part of the Consolidated Fund of India.
(3) Where an amount collected as tax levied under clause (1) has been
used for payment of the tax levied by a State under article 246A, such
amount shall not form part of the Consolidated Fund of India.
(4) Where an amount 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.
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W.P.No.541 of 2026 & batch
(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 taxation, the following
Acts came to be legislated: the Central Goods and Services Tax Act 2017; the
respective State Goods and Services Tax Acts, 2017; and the Integrated
Goods and Services Tax Act, 2017. In addition to these Acts, The Union
Territory Goods and Services Act, 2017 for Union Territories and The Goods
and Services Tax (Compensation to States) Act, 2017, to cover certain
contingencies, were brought into force.
17. Under the GST scheme, a tax payer became liable to pay tax, on
the same supply, under the APGST, CGST and IGST Acts. The Tax levied by
under the CGST and IGST, by the Central Government, was to be collected
19
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W.P.No.541 of 2026 & batch
by the officers, appointed under the Central Tax Act. Similarly, the Tax levied
by the State Government was to be collected by the officers, appointed under
the State Tax Act. However, there was a problem in this architecture. There
was a danger of conflicting orders being passed by a Central officer and the
State officer, in relation to the same supplies. Apart from this, the compliance
burden on the tax payers would be doubled as the tax payer would have to
maintain two sets of documents, accounts etc, and file returns, in relation to
the same supplies. In order to relieve this complication, a scheme of cross
empowerment was introduced. Under this method, a tax payer would be,
allotted, administratively, to either the Centre or the State and the officers,
appointed under the appropriate Act, would function as the ―proper officer‖ for
that tax payer. However, such an officer, appointed under the Central Act
would be empowered, only in relation to the proceedings, in the Central Act,
and would not be able to take up any proceedings under the State Act and
vice versa. This difficulty was cleared, by a system of cross empowerment,
by empowering such an officer to function as the proper officer under both
Acts. This principle would apply to the IGST Act also.
18. At the stage of operationalizing these Acts, the GST council laid
down some guidelines, as to the allocation of the tax payers, to the Central or
State authorities, in the 9th and 21st meetings held on 16.01.2017 and
09.09.2017. These guidelines were circulated as circular No.01/2017, stating
thus:
20
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W.P.No.541 of 2026 & batchCircular No.01/2017
F.No.166/Cross Empowerment/GSTC/2017
Office of the Goods & Services Tax Council
5th Floor. Tower-II, Jeevan Bharti Building.
Connaught Place, 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-regardingBased 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 for the Central
and the State tax administration;
iii. The division of taxpayers in each State shall be done by computer at the State
level based on stratified random sampling and could also take into account the
geographical location and type of the taxpayers, as may be mutually agreed;
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W.P.No.541 of 2026 & batch
2. Further, the broad guidelines for the purposes of computation of “Turnover” as
approved by the GST Implementation Committee in its meeting held on 31 August and 1
September 2017 and subsequently by the GST Council in its 21st Meeting held on 9
September 2017 are as follows:
i. For taxpayers registered only under VAT, the total annual State turnover under
VAT (including inter-State sales, exports and exempt goods) shall be taken as the basis
for division;
ii. For taxpayers registered under both VAT and Central Excise, the annual State
turnover under VAT shall be taken as the basis for division as State-level Central Excise
turnover is already included in it;
iii. For taxpayers registered only under Central Excise (and not under VAT), the
total annual turnover declared in Central Excise returns shall be taken as the basis for
division;
iv. For taxpayers registered only under Service Tax in a State on a stand-alone
basis, the annual turnover of the Services declared in the Service Tax returns shall be
taken as the basis for division;
v. For taxpayers registered only under Service Tax having centralized
registration, the annual all-India turnover of the Services declared in the Service Tax
returns shall be taken as the basis for division.
vi. For taxpayers registered under both VAT and Service Tax, the total non-
overlapping turnover (total of VAT and Service Tax, excluding any turnover which is
included in both) shall be calculated and used as the basis for division. The Service Tax
turnover shall be on the basis of clauses (iv) and (v) as the case may be.
3. The State Level Committees comprising Chief Commissioner/Commissioner
Commercial Taxes of respective States and jurisdictional Central Tax Chief
Commissioners/Commissioners are already in place for effective coordination between
the Centre and the States. The said Committees may now take necessary steps for
division of taxpayers in each State keeping in view the principles stated above.
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W.P.No.541 of 2026 & batch
Supplementary decisions, if any, may be taken 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
interpretation of Section 6 (1) of the GST Acts, would not mean that the State
authorities lose jurisdiction, in relation to the APGST Act, when the tax payer
is allotted to the administrative jurisdiction of the Centre. In fact, Section 6 (2)
and 6 (3) which read as follows, clarify the situation:
23
RRR,J& TCDS,J
W.P.No.541 of 2026 & batchSection 6. Authorisation of officers of State tax or Union territory
tax as proper officer in certain circumstances.
(1) …….
(2) Subject to the conditions specified in the notification issued
under sub-section (1),–
(a) where any proper officer issues an order under this
Act, he shall also issue an order under the State Goods
and Services Tax Act or the Union Territory Goods and
Services Tax Act, as authorised by the State Goods and
Services Tax Act or the Union Territory Goods and
Services Tax Act, as the case may be, under intimation to
the jurisdictional officer of State tax or Union territory tax;
(b) where a proper officer under the State Goods and
Services Tax Act or the Union Territory Goods and
Services Tax Act has initiated any proceedings on a
subject matter, no proceedings shall be initiated by the
proper officer under this Act on the same subject matter.
(3) Any proceedings for rectification, appeal and revision, wherever
applicable, 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.
21. The Hon’ble Supreme Court, while considering the ambit of
Section 6 (2), in Armour Security (India) Ltd. v. Commr. (CGST), (2025)
145 GSTR 385 : 2025 SCC OnLine SC 1700 had held as follows:
92. Clause (a) of sub-section (2) of section 6 of the CGST Act
stipulates that where any proper officer issues an order under the
CGST Act, he must issue an order under the SGST Act or the
UTGST Act in order to intimate the jurisdictional officer of the State
tax or Union territory tax. The provision reads thus:
―6(2) Subject to the conditions specified in the notification issued
under sub-section (1),–
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W.P.No.541 of 2026 & batch
(a) where any proper officer issues an order under this Act, he
shall also issue an order under the State Goods and Services Tax
Act or the Union Territory Goods and Services Tax Act, as authorised
by the State Goods and Services Tax Act or the Union Territory
Goods 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 above intent, section 6(2)(a) is couched in
terms that are both enabling and mandatory. It confers upon, and
simultaneously obliges, the proper officer to issue a corresponding
order under the SGST Act or the UTGST Act in cases where an order
is being issued under the CGST Act. The expression ―order‖,
qualified by the terms ―under this Act‖, occurring in the said provision
admits of a broad construction, so as to include every form of order
which a proper officer is competent to issue by virtue of the authority
vested in them under the statute. Such an interpretation is necessary
to ensure that the statutory mandate achieves its intended purpose of
avoiding multiplicity of proceedings and securing uniformity of
adjudication across the parallel enactments.
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W.P.No.541 of 2026 & batch
96. Inasmuch as the CGST Act vests the proper officer with authority
to issue ―orders‖ under various provisions, it becomes imperative that
such officer duly apprises the jurisdictional counterpart of any action
initiated by the Department in relation to a taxable person who may
otherwise fall within the administrative domain of that officer. Given
that the statutory framework envisages a regime of cross-
empowerment amongst officers, the obligation so cast operates as a
safeguard against the prejudice which may arise from the initiation of
parallel or overlapping proceedings against the same taxpayer by
different wings of the Department.
22. The Hon’ble High Court at Madras, in TVL Vardhan
Infrastructure vs. Special Secretary 1had considered the issue of cross
empowerment and had held that:
61. Thus, Section 6(1) of the respective GST Enactments
empowers Government to issue notification on the
recommendation of GST Council for cross-empowerment.
However, no notification has been issued except under
Section 6(1) of the respective GST Enactments for the
purpose of refund although officers from the Central GST and
State GST are proper officers under the respective GST
Enactments.
62. Since, no notifications have been issued for cross-
empowerment with advise of GST Council, except for the
purpose of refund of tax under Chapter-XI of the respective
GST Enactments r/w Chapter X of the respective GST Rules,
impugned proceedings are to be held without jurisdiction.
Consequently, the impugned proceedings are liable to be
interfered in these writ petitions.
1
2024 (16) CENTAX 509 (MAD)
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W.P.No.541 of 2026 & batch
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 State
or Central Tax Administration as the case may be cannot
usurp the power of investigation or adjudication of an
assessee who is not assigned to them.
66. Therefore, the proceedings initiated by the respondents so
far against the respective petitioners by the Authorities other
than the Authority to whom they have been assigned to are to
be held as without jurisdiction. Therefore, the impugned
proceedings warrant interference.
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W.P.No.541 of 2026 & batch
23. With due respect to the Hon’ble High Court at Madras, we
would hold that:
An officer, appointed under the APGST Act, is not automatically
cross empowered to exercise any function, under the CGST Act
or the IGST Act, unless the tax payer against whom any action is
proposed had been administratively allotted to the State of
Andhra Pradesh and the said officer has been appointed as the
proper officer, in relation to such a tax payer. The same principle
would apply vice versa to officers appointed under the CGST or
IGST Acts.
24. Since, the main issue, in the present case, is the jurisdiction of
officers, to exercise power under section 129 and 130, it would be necessary,
to consider, whether the above principles would govern, Section 129 and 130
also. Section 129 and Section 130 read as follows:
129. Detention, Seizure and release of goods and conveyances in
transit-
(1) Notwithstanding anything contained in this Act, where any
person transports any goods or stores any goods while they are in
transit in contravention of the provisions of this Act or the rules
made thereunder, all such goods and conveyance used as a means
of transport for carrying the said goods and documents relating to
such goods and conveyances shall be liable to detention or seizure
and after detention or seizure, shall be released:-
(a) on payment of the applicable tax and penalty equal to one
hundred per cent of the tax payable on such goods and, in case of
28
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W.P.No.541 of 2026 & batchexempted goods, on payment of an amount equal to two per cent of
the value of goods or twenty five thousand rupees, whichever is
less, where the owner of the goods comes forward for payment of
such tax and penalty;
(b) on payment of the applicable tax and penalty equal to the
fifty per cent of the value of the goods reduced by the tax amount
paid thereon and, in case of exempted goods, on payment of an
amount equal to five per cent of the value of goods 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 transporting any goods or the owner of the
goods fails to pay the amount of tax and penalty as provided in sub-
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W.P.No.541 of 2026 & batch
section (1) within fourteen days of such detention or seizure, further
proceedings shall be initiated in accordance with the provisions of
section 130:
Provided that where the detained or seized goods are perishable or
hazardous in nature or are likely to depreciate in value with passage
of time, the said period of seven days may be reduced by the proper
officer.
Section 130. Confiscation of goods or conveyances and levy
of penalty.
(1) Where any person—
(i) supplies or receives any goods in contravention of any of the
provisions of this Act or the rules made thereunder with intent to
evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax
under this Act; or
(iii) supplies any goods liable to tax under this Act without having
applied for registration; or
(iv) contravenes any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of
goods in contravention of the provisions of this Act or the rules
made thereunder unless the owner of the conveyance proves that it
was so used without the knowledge or connivance of the owner
himself, his agent, if any, and the person in charge of the
conveyance, then, all such goods or conveyances shall be liable to
confiscation and the person shall be liable to penalty under section
122.
(2) Whenever confiscation of any goods or conveyance is
authorised by this Act, the officer adjudging it shall give to the owner
of the goods an option to pay in lieu of confiscation, such fine as the
said officer thinks fit:
30
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W.P.No.541 of 2026 & batchProvided that such fine leviable shall not exceed the market value of
the goods confiscated, less the tax chargeable thereon:
Provided further that the aggregate of such fine and penalty leviable
shall not be less than the penalty equal to hundred per cent of the
tax payable on such goods:
Provided also that where any such conveyance is used for the
carriage of the goods or passengers for hire, the owner of the
conveyance shall be given an option to pay in lieu of the
confiscation of the conveyance a fine equal to the tax payable on
the goods being transported thereon.
(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
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W.P.No.541 of 2026 & batch
Commissioner, under the APGST Act, had assigned such function. By the
very nature of the ambit of section 129 and section 130, ―the proper officer‖
would be an officer who has been assigned a general function to check goods
under transit. Such an officer would not be confined to certain tax payers only
and would have jurisdiction to check all or any vehicle or conveyance,
transiting the area assigned to him. Further, an officer assigned functions
under Section 129 would also be assigned functions under Section 130 also,
as these provisions are complementary and are intertwined.
26. In such a situation, the cross empowerment, under Section 6 of
the CGST Act and Section 4 of the IGST Act, would be sufficient to hold that a
State officer, appointed as a ―proper officer‖ under the APGST Act, can
discharge all the functions of a ―proper officer‖ under Section 129 and 130, for
the purposes of the CGST Act. We are of the opinion that different factors
operate, in the case of the IGST Act.
27. The IGST Act was enacted to collect GST on inter-state supply
of goods and services. The taxes paid under this Act, are to be shared,
according to Section 17 of the IGST Act, in the following manner:
17. Apportionment of tax and settlement of funds.–
(1) Out of the integrated tax paid to the Central
Government,–
(a) in respect of inter-State supply of goods or
services or both to an unregistered person or to a registered
person paying tax under section 10 of the Central Goods and
Services Tax Act;
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W.P.No.541 of 2026 & batch
(b) in respect of inter-State supply of goods or
services or both where the registered person is not eligible for
input tax credit;
(c) in respect of inter-State supply of goods or
services or both made in a financial year to a registered
person, where he does not avail of the input tax 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 made;
(d) in respect of import of goods or services or both by
an unregistered person or by a registered person paying tax
under section 10 of the Central Goods and Services Tax Act;
(e) in respect of import of goods or services or both
where the registered person is not eligible for input tax credit;
(f) in respect of import of goods or services or both
made in a financial year by a registered person, where he
does not 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
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W.P.No.541 of 2026 & batch
(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 making such
supplies is not identifiable, the said balance amount shall be
apportioned to all States and the Central Government in
proportion to the amount collected as State tax or, as the
case may be, Union territory tax, by the respective State or, as
the case may be, by the Central Government during the
immediately preceding financial year.
[(2A) The amount not apportioned under sub-section (1) and
sub-section (2) may, for the time being, on the
recommendations of the Council, be apportioned at the rate of
fifty per cent. to the Central Government and fifty per cent. to
the State Governments or the Union territories, as the case
may be, on ad hoc basis and shall be adjusted against the
amount apportioned under the said sub-sections.](3) The provisions of sub-sections (1) and (2) relating to
apportionment of integrated tax shall, mutatis mutandis, apply
to the apportionment of interest, penalty and compounding
amount realised in connection with the tax so apportioned.
(4) Where an amount has been apportioned to the Central
Government or a State Government under sub-section (1) or
sub-section (2) or sub-section (3), the amount collected as
integrated tax shall stand reduced by an amount equal to the
amount so apportioned and the Central Government shall
transfer to the central tax account or Union territory tax
account, an amount equal to the respective amounts
apportioned to the Central Government and shall transfer to
the State tax account of the respective States an amount
34
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W.P.No.541 of 2026 & batchequal to the amount apportioned to that State, in such manner
and within such time as may be prescribed.
(5) Any integrated tax apportioned to a State or, as the case
may be, to the Central Government on account of a Union
territory, if subsequently found to be refundable to any person
and refunded to such person, shall be reduced from the
amount to be apportioned under this section, to such State, or
Central Government on account of such Union territory, in
such manner and within such time as may be prescribed.
28. The purpose of Section 129 and 130, is to ensure compliance of
the provisions of the GST Acts and for checking evasion of tax. In the normal
course, evasion of tax, on intra state sales, would result in non payment of
taxes, which are rightfully due to that State and the Union. Thus, the State or
Central authority, assigned the functions 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
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W.P.No.541 of 2026 & batch
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, amounts rightfully due to State
A or State C are being appropriated, by State B. It is our view that Section 129
or 130 cannot be pressed to vindicate such appropriation.
30. Even if it is held that the State officer of State B, is cross
empowered to undertake such a function, various high courts have gone into
the question of whether, such an officer is empowered to go into questions of
value etc., and held to the contrary. The Hon’ble High Court of Kerala in Alfa
Group Vs. The Assistant State Tax Officer, State Goods and Service Tax
Department & Ors.2, the Hon’ble High Court of Chhattisgarh in K.P.
Sugandh Ltd. & Others Vs. State of Chhatisgarh & Ors, 3 the Hon’ble High
Court of Gujarat in Panchi Traders Vs. State of Gujarat 4 and the Hon’ble
High Court of Allahabad in shambhu Saran Agarwal & Company Vs.
5
Additional Commissioner Grade., had held that such power is not
available to an officer under Section 129 or 130 of the GST Acts.
2
2020 (34) G.S.T.L. 142
3
2020 (38) GSTL 317
4
2025 (12) TMI 941
5
2024 (84) GSTL 181 (All.)
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W.P.No.541 of 2026 & batch
31. The Hon’ble High Court of Chhatisgarh, in K.P. Sugandh Ltd. &
Others Vs. State of Chhatisgarh & Ors, approving the judgment of the
Hon’ble High Court of Kerala in Alfa Group Vs. The Assistant State Tax
Officer, State Goods and Service Tax Department & Ors., had held as
follows:
10. Merely because the manufacturer sells his products to its
customer or dealer at a price lower than the MRP, as such
cannot be a ground on which the product or the vehicle could
be seized or detained. If at all if this, according to the
respondents, is contrary to the law, the authorities are
supposed to draw an appropriate proceeding under the law. If at
all what the State counsel has submitted is to be accepted,
even then it would be only a case of an alleged sale of a
product at a lower costs than the MRP. The Inspecting
Authorities for the alleged discrepancy could have only
intimated the Assessing Authority for initiating appropriate
proceedings. What is more relevant to take note of is the fact
that the details in the invoice bill as well as in the e-way bill
matched the products found in the vehicle at the time of
inspection except for the price of sale.
11. The High Court of Kerala in the case of “Alfa Group v.
Assistant State Tax Officer” (2020) 113 taxmann.com 222
(Kerala) in an identical set of facts has held as under:
“On a consideration 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
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RRR,J& TCDS,J
W.P.No.541 of 2026 & batchthat 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. I also direct the Commissioner, Kerala
State Taxes Department, Thiruvananthapuram to issue suitable
instructions to the field formations so that such unwarranted
detentions are not resorted to in future. The Registry shall
communicate a copy of this judgment to the Commissioner,
Kerala State Taxes Department, Thiruvananthapuram for
necessary action.”
14. Given the said facts and circumstances of the case, this
Court is of the opinion that under valuation of a good in the
invoice cannot be a ground for detention of the goods and
vehicle for a proceeding to be drawn under Section 129 of the
Central Goods and Service Tax Act, 2017 read with Rule 138 of
the Central Goods and Service Tax Rules, 2017. In view of the
aforesaid the impugned order Annexure P/1 i.e. the order
passed under Section 129 and the order of demand of tax and
penalty both being unsustainable deserves to be and is
accordingly set-aside/quashed. The respondents are forthwith
directed to release the goods belonging to the petitioners based
on the invoice bill as well as the e-way bill.
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W.P.No.541 of 2026 & batch
32. The Hon’ble High Court of Gujarat in Panchi Traders Vs. State of
Gujarat , had held as follows:
63. Thus, in case, there are first degree minor aberrations in
the documents such as the difference in value shown in the
eway bill and the delivery challan, minor error in vehicle
number, etc, as referred in the Circular dated 14th September,
2018, the proper officer cannot seize the goods and
conveyance. If the violation is of second degree, inviting
contravention of the provision of Act or Rule, where the
element of intention of evasion to pay the tax is not involved,
the person/dealer shall be allowed to resort to
remedy of paying penalty as specified under Section
129 of the CGST Act, and on payment of amount referred in
sub-section(1), all proceedings in respect of the notice
specified in sub-section(3) stands concluded. In case, the
amount is not paid, such goods are liable to be sold or
disposed as per provisions of subsection (6). In view of the
foregoing clarification, only in case of blatant violation or
contravention of provisions of the Act or Rules, which has
direct nexus with the intention to evade payment of tax, the
confiscation of goods and conveyance, during transit can be
resorted.
64. In order to invoke the severe
action of confiscation of goods and conveyance, 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
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W.P.No.541 of 2026 & batchofficer 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, dated 16.02.2026, and had observed
as follows:
8. For all the aforesaid reasons, this Court is of the view that the
goods, which have been seized or confiscated under various
impugned orders, would require to be released.
9. As far as W.P.No.3258 of 2026, is concerned, the contention
of the respondents is that, the vehicle in question was inspected
by the Officials and subsequently, by the proper Officer, who had
a complaint from the said Officials, that the driver of the vehicle
was not willing to reveal any details. The respondents also
contended that, on account of the refusal of the driver to give any
details, online verification was done, and it was found that, there
were no E-Way Bills issued for the consignment in question.
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W.P.No.541 of 2026 & batch
10. The contention is that the petitioner, having realized that his
consignment was under inspection, had got an E-Way Bill
prepared, after the first inspection has been completed and
forwarded it to the driver of the vehicle.
11. In such circumstances, this Court cannot accept the fact that
there was inspection much prior to the actual inspection, which
was recorded in Form – A.
12. Rule 138C of the C.G. & S.T. Rules, 2017, requires a
summary report of every inspection of the goods in transit to be
recorded online by the proper officer in Part A within 24 hours of
inspection and a final report in Part B to be recorded within three
(03) days of such inspection.
13. In the present case, there were two inspections, according to
the respondents.
14. The first inspection has not been recorded and no report has
been placed online. A report has been prepared for the second
inspection and placed online. In this report, there is no mention
about inspection of the vehicle earlier.
35. We have not been shown anything to modify the aforesaid
observations. In the circumstances, this contention of the respondents would
have to be rejected.
36. We are also alive to the fact that, the proper officer, under the
APGST Act, at the time of intercepting the conveyance or vehicle, would not
be aware whether the consignment, is under the IGST Act or any of the other
GST Acts, until the vehicle is stopped and the documents are verified. In a
case where it is found that the consignment relates to an interstate supply, the
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W.P.No.541 of 2026 & batch
state officer would have to permit the vehicle to continue it’s journey.
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 APGST Act, can discharge
such functions, under the IGST Act also, in relation to inter-state sales, only
when the State of Andhra Pradesh is entitled to an allocation of a share of the
tax , under section 17 of the IGST Act, in relation to such transaction.
D. A ―proper officer’ appointed under the APGST Act, and assigned
the functions, under section 129 and/or 130, of the APGST Act, can not
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W.P.No.541 of 2026 & batchdischarge such functions, under the IGST Act, in relation to inter state sales,
which originate outside the State and culminate outside the State.
E. In the event of any discrepancies found, in any movement of
goods, under the IGST Act, it would be open to the State officer, to forward
the said discrepancies to the proper officer of the consignee and the proper
officer of the consignor, to take further action.
38. In view of the above, all these writ petitions are disposed of,
setting aside the proceedings initiated against the petitioners above, under
section 129 or 130, while leaving it open to the respondents to forward their
records, as well as the samples, that were directed by this court to be drawn,
in the interlocutory order, dated 16.02.2026, to the respective proper officers
of the petitioners.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
There shall be no order as to costs.
________________________
R. RAGHUNANDAN RAO, J
_______________
T.C.D. SEKHAR, J
RJS
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W.P.No.541 of 2026 & batch
THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
&
THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR
WRIT PETITION NOs: 541, 1756, 3097, 3225, 3227, 3252, 3254, 3258 and
3354 of 2026
(per Hon’ble Sri Justice R.Raghunandan Rao)
01.04.2026
RJS
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W.P.No.541 of 2026 & batch
