Sudhish P.P. vs. State Tax Officer And Other
(Kerala High Court, Kerala)

Case Law
Petitioner / Applicant
Sudhish P.P.
State Tax Officer And Other
Kerala High Court
Aug 4, 2021
Order No.
WP(C) NO. 15566 OF 2021
TR Citation
2021 (8) TR 4445
Related HSN Chapter/s
Related HSN Code


2. Learned counsel appearing for the petitioner submits that the petitioner is a goldsmith by profession and he used to take orders from the jewellers for the purpose of manufacturing the gold ornaments on labour charge basis. It is further submitted that the petitioner wanted to display some ornaments to the jewellers for soliciting orders and accordingly went to Palakkad for obtaining job works from jewellers. He carried with him different types of gold ornaments for the purpose of display and demonstration to the jewellers. However, the 1st respondent inspected the bag carried by the petitioner and the petitioner instantaneously disclosed that the bag contains 233.540 gms of gold ornaments carried by the petitioner for the purpose of displaying and not for sale.

3. Learned counsel appearing for the petitioner further submitted that the respondent straight away issued notice in the form of GST MOV-10 for confiscation of the goods and levy of penalty under Section 130 of the Central Goods and Service Tax Act, 2017. Learned counsel appearing for the petitioner urged that this Court has held that straight away no action under Section 130 of the GST Act can be taken and for initiating such action, there must be an element of mens rea. It is further submitted that even Hon’ble Gujarat High Court has held that mere suspicion is not sufficient to initiate action under Section 130 of the GST Act. It is submitted that the quantity of gold is a small quantity and respondents have not rebutted the contention of the petitioner that the articles were for the purpose of demo and display.

4. Learned Senior Government Pleader drew my attention to the provisions of Section 130 of the CGST Act as well as Rule 138A of the CGST Rules, 2017. She submitted that the matter rests only at the stage of show cause notice and all these contentions can be raised by the petitioner before the concerned officer. On merits, the learned Senior Government Pleader submitted that the petitioner was not carrying any valid document in support of the material found to be transported by him.

5. I have considered the submissions so advanced and perused the impugned communication at Ext.P1. It is merely a notice in the Form of GST MOV-10. Paragraph No.7 of the said notice reads thus:-

“7. You are hereby directed to show cause, within seven days from the receipt of this notice, as to why the goods in question and the conveyance used to transport such goods shall not be confiscated under the provisions of section 130 of the Central Goods and Services Tax Act or the integrated Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, 2017 and why the tax, penalty and other charges payable in respect of such goods and the conveyance shall not be payable by you.”

It is thus clear that the petitioner is only required to show cause within seven days of the notice as to why action under Section 130 of the CGST Act should not be taken against the petitioner. Section 130 of the CGST Act, 2017 contemplates opportunity of hearing in order to decide whether the goods are required to be confiscated or not. No doubt, while taking action under Section 130 of the said Act, the proper officer is enjoined with the duty to come to the conclusion that the act on the part of the petitioner is only with an intent to avoid payment of tax, but that has to be decided by the proper officer on consideration of the entire materials before him and that too, after hearing the petitioner.  

6. In this view of the matter, the petitioner has to approach the proper officer for making his stand clear and to seek audience before him. Writ Court cannot give its own finding without there being any finding by the proper officer in the light of the show cause notice and reply thereto by the affected person. The petition as such is premature and the same is accordingly dismissed.

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