2021 (12) TMI 1038 - HC - GST

Seizure and confiscation of goods - Carrying Gold without delivery challan - Validity of proceedings initiated under section 130 of the Central Goods and Services Tax Act, 2017 - dealer in gold jewellery - HELD THAT - Ext.P5 order clearly endorses the satisfaction of the Proper Officer that the mandatory documents prescribed under section 31 of the Act read with rule 55 of the CGST Rules, 2017 was admittedly not available with the petitioner while transporting the huge quantity of gold ornaments. After conducting a hearing, pursuant to the notice issued, the officer came to the conclusion that absence of delivery challan and the circumstances attended therewith clearly showed an intention to evade tax without any ambiguity. The aforesaid conclusion is a finding of fact. This finding cannot be interfered with in exercise of the powers under Article 226, unless it is perverse or without anything explicitly contradicting such a finding. The question whether absence of mandatory documents in the particular case constitute an intention to evade tax or not is a matter within the realm of satisfaction of the Proper Officer. Interference in the satisfaction exercised by the Proper Officer, when the conclusion is supported by the circumstances surrounding the transaction, warrants no interference by this Court, as otherwise, the scheme and purport of the Act will be affected. Petition dismissed.

Summary

Issues:
Challenge to proceedings under section 130 of the Central Goods and Services Tax Act, 2017; Detention and confiscation of gold ornaments without mandatory documents; Interpretation of intention to evade tax; Validity of order of confiscation; Consideration of satisfaction of Proper Officer; Availability of remedy of appeal under section 107 of the Act.

Analysis:
The petitioner, a dealer in gold jewellery, challenged the proceedings initiated under section 130 of the Central Goods and Services Tax Act, 2017. The petitioner was found carrying gold ornaments without mandatory documents, leading to their detention and subsequent confiscation. The order of confiscation was challenged in a writ petition, along with a final intimation to remit the demanded amount failing which further steps to sell the confiscated gold ornaments would be initiated. The petitioner contended that there was no intention to evade tax, citing a previous decision. The Senior Government Pleader argued against interference, highlighting the availability of an appeal remedy under section 107 of the Act.

The court considered the contentions of both parties. The order of confiscation endorsed the Proper Officer's satisfaction regarding the absence of mandatory documents and the intention to evade tax. The court noted that the finding of fact regarding the intention to evade tax was based on the circumstances and could not be interfered with under Article 226 unless perverse. The court emphasized that disputed factual questions should be addressed through the appellate authority, not under Article 226. The court held that interference in the Proper Officer's satisfaction, supported by transaction circumstances, would affect the Act's scheme. Consequently, the court found no merit in the writ petition and dismissed it.

In conclusion, the court upheld the order of confiscation based on the Proper Officer's satisfaction regarding the absence of mandatory documents and the intention to evade tax. The court emphasized the need to address disputed factual questions through the appellate authority and not under Article 226. The court's decision highlighted the importance of not interfering with the Proper Officer's satisfaction when supported by transaction circumstances to maintain the Act's integrity. The court dismissed the writ petition, affirming the order of confiscation and emphasizing the availability of the appeal remedy under section 107 of the Act.