A Single Bench of the Kerala High Court has recently held that carrying of gold in pocket without proper documents is sufficient to suspect Goods and Services Tax (GST) evasion.
The first petitioner was stated to be the proprietor of an establishment known as ‘A One Gold’, having its place of business at Chembukavu in Thrissur district, Kerala.
It was submitted by the counsel on behalf of the petitioners, Advocate Tomson T Emmanuel that there was absolutely no warrant for initiation,continuation and conclusion of proceedings under Section 130 of the Central Goods and Services Tax or State Goods and Services Tax Acts.
It was further submitted that the goods in question were having every document necessary to prove that they were being transported in full compliance with the GST laws.
The petitioner further contended that, when the goods in question were supported by valid documents, the action of the officers in initiating and concluding proceedings under Section 130 of the Goods and Services Tax Acts was completely unwarranted and without jurisdiction.
It was observed by the Bench of Justice Gopinath P that, “The contention of the learned counsel appearing for the petitioners that the 2nd petitioner had forgotten to hand over about 100 gms of gold, which was being carried in his pocket, cannot be accepted.”
The Kerala High Court, at this instance, considering discrepancy in the quantity of gold, observed, “However, there is no satisfactory explanation for the fact that there was a discrepancy in the quantity mentioned in the documents produced by the 1st petitioner in the evening before the Tax authorities and the quantity actually recovered from the petitioner.”
The revenue, represented by Senior Government Pleader Thushara James contended that, It is this discrepancy in quantity of Gold itself is sufficient to prove that the proceedings under Section 130 of the Central and State GST Acts was completely warranted as there was clear attempt to evade payment of tax.
In agreement with this contention, the Kerala High Court held that, “The fact that there was discrepancy in the quantity in the documents stated to have been produced and the quantity recovered from the 2nd petitioner itself, in my opinion, is sufficient for the Department to suspect the evasion of tax.”
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