In a recent ruling, the Allahabad High Court addressed the jurisdiction and authority of State GST officers under the Integrated Goods and Services Tax (IGST) Act. The case involved Shree Maa Trading Co. and others, whose goods were intercepted while in transit from Delhi to Raipur. The interception occurred in Jhansi on May 26, 2025, and was followed by a series of procedural steps under Section 129 of the GST Act, resulting in a penalty order.
The petitioners challenged the proceedings, arguing that the show cause notice was issued beyond the stipulated seven-day period, and that the driver of the consignment had failed to produce necessary documents, despite their existence. They also contended that State officers lacked jurisdiction under the IGST Act without a special notification. However, the authorities determined that the transactions were bogus and not reflected in the GST returns.
The court ruled that State GST officers are indeed empowered to act under the IGST Act, and that the detention and penalty under Section 129 were valid, particularly in cases where transactions were found to be fraudulent. The court clarified that officers appointed under the State Goods and Services Tax are authorized to perform duties as Proper Officers for IGST and CGST purposes. Furthermore, the court held that no special notification was required for State officers to exercise this authority. As a result, the court upheld the findings of bogus transactions and dismissed the writ petitions filed by the petitioners.
Date of Order: 21 August 2025
Parties: Shree Maa Trading Co. & Ors. v. State of U.P. & Ors.
Facts –
- The petitioner's goods in transit from Delhi to Raipur were intercepted at Jhansi on 26.05.2025. Detention u/s 129 followed: MOV-01 (27.05.2025), MOV-04 and MOV-06 (01.06.2025), DRC-01 (03.06.2025).
- Petitioners argued SCN issued beyond 7 days, driver failed to produce documents though they existed, and State officers lacked IGST jurisdiction absent special notification.
- Authorities held transactions were bogus and not reflected in GST returns.
Issue –
- Whether delay in SCN invalidated proceedings and penalty could be imposed under Section 129(1)(b)?
Order –
- The single bench of the Hon’ble High court held that State GST officers are empowered to act under the IGST Act; detention/penalty under Section 129 is valid where transactions are found bogus.
- The provision provides that the Officer appointed under the State Goods & Service Tax is authorized to discharge their duties as Proper Officer for the purpose of IGST & CGST
- If the invoice or any other specified document is not accompanying the consignment of goods, then in such cases, the proper officer should determine who should be declared as the owner of the goods. Once, at the time of detention or seizure, no specified documents were produced, then the proceedings have rightly been initiated agianst the petitioner in absence of specified documents under section 129(1)(b) of the GST Act for release of goods.
- The court held State GST officers competent under Section 4 IGST Act and Section 6 CGST Act; no special notification needed.
- Authorities’ finding of bogus transactions sustained; writ petitions dismissed.
