GST: State Tax Officers cannot act as proper officers for Interstate Transits

A batch of writ petitions, led by M/s. Golden Traders, challenged orders passed in Form GST MOV-11 under Section 130 of the CGST/APGST Act. In these cases, goods were being transported from states like Kerala or Karnataka to destinations like Delhi or Maharashtra, passing through Andhra Pradesh. The vehicles were intercepted by Andhra Pradesh state tax officers who initiated detention and confiscation proceedings.

The primary grounds for these actions were gross undervaluation of goods, mismatches in description, or discrepancies in the quantum of goods compared to accompanying documents. The petitioners contended that since the movement was inter-state and neither originated nor terminated in Andhra Pradesh, the state officers lacked the jurisdiction to act as “proper officers” for such transits.

Main Issue: Whether officers appointed under the APGST Act have the jurisdiction to initiate proceedings under Section 129 or Section 130 for the interception, detention, or confiscation of goods where the movement falls under the IGST Act and occurs entirely outside the territorial jurisdiction of the state (i.e., transits originating and ending in other states).

HC’s Order: The Division Bench allowed the petitions and set aside the confiscation proceedings. The Court held that while Section 4 of the IGST Act and Section 6 of the CGST Act provide for cross-empowerment, this authority is not absolute or without territorial limits. The Bench clarified that a state officer’s jurisdiction is fundamentally tied to their assigned territory. For inter-state sales that neither start nor end within Andhra Pradesh, the state’s “proper officers” cannot exercise statutory functions under the IGST Act.

The Court ruled that in cases of suspected discrepancies during such transits, the state officer’s role is limited to forwarding the relevant records and samples to the “proper officers” of the respective consignor or consignee’s jurisdiction for further action.

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