NAKODA JEWELS Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner challenges an order dtd. 12/10/2017 imposing penalty and tax under sec. 129(3) of the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017 (for short 'GST Act'). Petitioner also challenges the order of the Appellate Authority dtd. 28/5/2024 dismissing its first appeal. This writ petition was filed since the Tribunal contemplated under the GST Act has not yet been constituted.

(2.) Writ petitioner is a manufacturer and dealer in jewellery registered in Karnataka. According to the petitioner, on 9/10/2017, while its representative was carrying new gold ornaments weighing 15712.50 grams and valued at Rs.4,66,79,854.00 from Bangalore to Calicut on the basis of an e-way bill, it was intercepted by the Excise Inspector, who thereafter handed it over to the State Tax Officer, for verification. The gold ornaments transported by the petitioner's representative, was detained and it was noticed that the consignee's GSTIN was that of M/s.Malabar Gold registered in Karnataka, while the address shown in the e-way bill was that of M/s.Malabar Gold, Kozhikode. Apart from the above, it was also noticed that the actual weight of the gold ornaments was only 15660.28 grams, thus having a shortage of 52.22 grams in weight. In view of the above discrepancies and since the consignment was not accompanied by the documents prescribed under the Kerala Goods and Service Tax Rules, 2017 (for short 'KGST Rules, 2017') and the GST Act, the goods and the vehicle were detained and proceeding was initiated under sec. 129 of the GST Act, culminating in imposition of penalty and tax of Rs.28,13,560.00.

(3.) According to the petitioner, the consignment arose from Karnataka and since it is an inter-State transaction, after payment of IGST, there cannot be any imposition of tax. Petitioner also contends that the gold ornaments were being brought to Kerala for approval, which was supported by an e-way bill and hence, the transaction cannot be said to be contrary to law. Further, according to the petitioner, insistence on carrying documents prescribed under the KGST Rules, 2017 for an inter-State transaction which originated in Karnataka is without authority. Petitioner also contends that the transaction was entered in the online portal of the State Goods and Service Department, Karnataka and hence there is no suppression warranting levy of any penalty.