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A Mere Discrepancy Is Enough For Suspicion: High Court Of Kerala

Bidisha Ghoshal ,
  28 January 2023       Share Bookmark

Court :
The High Court of Kerala.
Brief :

Citation :
WP(C) NO. 31445 OF 2022.

CASE TITLE:

Sasi Pathirakunnath v. Assistant State Tax Officer & Ors.

DATE OF ORDER:

18 January 2023.

JUDGE(S):

Gopinath P.

PARTIES:

Petitioner: Sasi Pathirakunnath.

Respondent: Assistant State Tax Officer & Ors.

SUBJECT:

In the present case, the Court is dealing with a case wherein the appellants were stopped by the Railway Protection Force (RPF) as there were discrepancies between the information delivered by and the quantum of ornaments found from the appellant.

BRIEF FACTS: 

  • The 1st petitioner is the proprietor of an establishment called 'A One Gold', based in Chembukavu, Thrissur district. 
  • The 2nd petitioner was travelling on a train from Thrissur to Alleppy on 07.09.2022, carrying gold ornaments from the 1st petitioner. 
  • The 2nd petitioner was stopped by the Railway Protection Force (RPF) and questioned about documents to prove the gold was being transported in compliance with the GST laws. 
  • The 1st petitioner then brought the necessary documents, but the police entrust the matter with the GST Department. 
  • The petitioners argue that they had all the necessary documents to prove that they were transporting the gold in full compliance with the GST laws, but the GST officials initiated and concluded proceedings under Section 130 of the CGST/SGST Acts, which is the subject of the writ petition. 

QUESTIONS RAISED:

  • Whether the appellant’s mistake was countable in the eyes of law?

ARGUMENTS ADVANCED BY THE APPELLANT:

  • The learned counsel is arguing that the authorities had no legal justification to start, continue, and finish the proceedings under Section 130 of the CGST/SGST Acts. As the goods in question were supported by valid documents, the action of the officers was inappropriate and unlawful.
  • The petitioners’ learned counsel argues that there is no evidence to suggest a wilful attempt to evade the payment of any taxes due to the government and that the proceedings should therefore be quashed.

ARGUMENTS ADVANCED BY THE RESPONDENT:

  • The respondent counsel explains that the discrepancy between the amount of gold recovered from the petitioner and the amount stated in the documents is sufficient to prove that the proceedings under Section 130 of the CGST/SGST Acts was completely warranted. 
  • It also states that the explanation offered by the 2nd petitioner that he had forgotten to handover about 100 gms of gold is an afterthought and is an attempt to ensure that the quantity of goods seized by the railway police and which was subsequently the subject matter of proceedings under the CGST/SGST Acts, completely tallys with the documents stated to have been produced later by the 1st petitioner before the authorities.

ANALYSIS OF THE COURT:

  • This court observes that the 2nd petitioner was carrying certain gold ornaments in a train and was intercepted by officials. The 1st petitioner was able to produce certain documents claiming that the gold was being carried in a valid and legal manner. However, there was a discrepancy in the quantity of gold mentioned in the documents and the quantity actually recovered from the petitioner. 
  • The court found that this discrepancy was enough to suspect evasion of tax and that the officers were justified in initiating proceedings under Section 130 of the CGST/SGST Acts. 
  • The court also held that it would not interfere with the order of adjudication and that it would be open to the petitioners to raise all their contentions before the appellate authority. 
  • Finally, the court ruled that if the petitioners filed an appeal within two weeks, the period from the date of issuance of the order till the date of the judgment would be excluded for the purposes of determining any period of limitation.

CONCLUSION

In conclusion, the court found that there was sufficient evidence to warrant proceedings under Section 130 of the CGST/SGST Acts and that it would not interfere with the order of adjudication. The court also ruled that if the petitioners filed an appeal within two weeks, the period from the date of issuance of the order till the date of the judgment would be excluded for the purposes of determining any period of limitation

Click here to download the original copy of the judgement.

 
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