The Andhra Pradesh High Court (Amaravati Bench) has clarified that an officer, appointed under the APGST Act, would be cross empowered, to exercise jurisdiction under the CGST or IGST Act, in relation to a tax payer, when such tax payer has been administratively allotted to the State and the State officer is the ‘proper officer’, assigned to discharge the said function, by the Chief Commissioner and vice versa for Central officers. A “proper officer” appointed under the APGST Act, and assigned the functions, under section 129 and/or 130, of the APGST Act, can discharge such functions, under the CGST Act also, in relation to intra state sales.
The High Court stated that the proper officer appointed under the APGST Act, and assigned the functions, under section 129 and/or 130, of the APGST Act, can discharge such functions, under the IGST Act also, in relation to inter-state sales, only when the State of Andhra Pradesh is entitled to an allocation of a share of the tax, under section 17 of the IGST Act, in relation to such transaction.
The Court held that the proper officer appointed under the APGST Act, and assigned the functions, under section 129 and/or 130, of the APGST Act, cannot discharge such functions, under the IGST Act, in relation to inter-state sales, which originate outside the State and culminate outside the State. In the event of any discrepancies found, in any movement of goods, under the IGST Act, it would be open to the State officer, to forward the said discrepancies to the proper officer of the consignee and the proper officer of the consignor, to take further action.
The writ petitions were therefore disposed of, setting aside the proceedings initiated against the petitioners under section 129 or 130 of the CGST Act, while leaving it open to the respondents to forward their records and samples to the respective proper officers of the petitioners.
The Division Bench comprising Justice R Raghunandan Rao and Justice T.C.D. Sekhar observed that Section 129 deals with detention/seizure and release of goods and conveyances in transit, and Section 130 deals with confiscation of goods or conveyances and levy of penalty, both of which can only be exercised by a ‘proper officer’. The term ‘proper officer’ is defined in Section 2(91) of the APGST Act as the Chief Commissioner or the officer of the State tax who is assigned that function by the Chief Commissioner. Assignment of a function under the APGST Act would not empower such an officer to act under either the CGST Act or under the IGST Act.
The Bench explained that the GST regime created a system of simultaneous taxation requiring constitutional amendments, specifically Articles 246A and 269A, which conferred exclusive power to tax interstate supply of goods and services on Parliament. To relieve the complication of conflicting orders and double compliance burden, a scheme of cross-empowerment was introduced where a taxpayer is administratively allotted to either the Centre or the State.
Essentially, the Bench held that an officer appointed under the APGST Act is not automatically cross-empowered to exercise any function under the CGST Act or the IGST Act unless the taxpayer against whom any action is proposed had been administratively allotted to the State of Andhra Pradesh and the said officer has been appointed as the proper officer in relation to such a taxpayer.
Regarding the IGST Act, the Bench observed that taxes paid under this Act are to be shared according to Section 17 of the IGST Act. The purpose of Section 129 and 130 is to ensure compliance and check evasion of tax, recovering rightful dues of that State and the Union. In the case of IGST, no part of the taxes are due to any intermediary state through which the goods are passing. Therefore, an intermediary state cannot levy and collect penalties or fines under Section 129 or 130, as it would result in appropriating amounts rightfully due to the originating or destination states.
Moving ahead, the Bench observed that questions of seizure or confiscation would not arise before a proper officer under Section 129 or 130, even in the normal course, on grounds of variation in valuation. Undervaluation of a good in the invoice cannot be a ground for detention of the goods and vehicle for a proceeding to be drawn under Section 129 of the Central Goods and Service Tax Act, 2017. The proper officer cannot venture into the assessment and valuation of goods at the time of interception of the vehicle.
Briefly, the officers appointed under the APGST Act, at various check posts in the State of Andhra Pradesh, intercepted consignments moving in the course of interstate trade from a point of origin outside the State of Andhra Pradesh to a destination which is also outside the State of Andhra Pradesh. Following the interception, proceedings were initiated initially under Section 129 of the GST Act, and in some cases, these proceedings were continued under Section 130 of the GST Act.
The said goods were accompanied by all the necessary documents set out under Section 68 of the GST Act, 2017, except in W.P.No.3258 of 2026. The goods were intercepted and proceedings were initiated and continued on the ground that the goods were grossly undervalued, or that the goods did not match the description set out in the accompanying documents, or that the quantum of goods intercepted was far higher than the quantum set out in the accompanying documents.
The respondents contended that the petitioner was transporting goods without waybills and that the driver refused to give details, leading to an online verification which showed no E-Way Bills were issued. However, the Court noted that there were two inspections, and the first inspection was not recorded online as required by Rule 138C of the C.G. & S.T. Rules, 2017, leading the Court to reject the respondents’ contention.
Appearances:
Advocates P. Girish Kumar, V. Raghuraman, M.V.J.K. Kumar, Pasupuleti Venkata Prasad, Sameer Gupta, and Akula Vamsi Krishna, for the Petitioner/ Taxpayer
Advocate R. Kalyan Chakravarthy, for the Respondent/ Revenue
