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2019-VIL-151-KER

SGST High Court Cases

Kerala SGST Act, 2017 – Section 67 & 130 - the petitioners entrusted gold jewellery with the hallmarker under cover of delivery challan and issue vouchers for the purposes of hallmarking of jewellery – petitioner seeking quashing seizure orders and prohibition orders, insofar as they relate to the quantity of gold jewellery entrusted by the petitioners to the hallmarker and seized during inspection at the premises of hallmarker – HELD - The proceedings initiated under the SGST Act against the hallmarker must be for recovery of any tax from him or for the imposition of any penalty in connection with any offence committed by him in that context - in any proceedings against the hallmarker, the authorities under the SGST Act, cannot ultimately confiscate the gold seized from the hallmarker, when it cannot be disputed that the gold jewellery seized belongs to the petitioners, and the entrustment of the same is evidenced by the delivery challans and issue vouchers - the seizure of the gold jewellery from the premises of the hallmarker, may be justified in accordance with Section 67 of the SGST Act, for the purposes of enabling the authorities to compute the ultimate liability of tax and/or penalty under the SGST Act. Beyond that, the seizure of the gold jewellery, which belongs to the petitioners, and against whom no proceedings are initiated under the SGST Act, is not justified - in the context of the present proceedings, the goods entrusted to the hallmarker by the petitioners, cannot be confiscated in terms of Section 130 of the SGST Act, since the confiscation under the said provision can only be in respect of supplies or receipt of any goods in contravention of any of the provisions of the Act, with an intent to evade payment of tax. There being no possibility of an evasion of tax in respect of the goods, by the hallmarker since the goods themselves belong to the petitioners - the goods entrusted by the petitioners, with the hallmarker, and covered by the delivery challan and issue vouchers, cannot be the subject matter of a confiscation order under Section 130 of the SGST Act – the impugned seizure orders and prohibition orders stands quashed - The writ petitions are disposed in favour of petitioner

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