Facts of the Case:

In this case, the petitioner challenged detention, seizure, and confiscation of goods by officers under the APGST Act at check-posts in Andhra Pradesh. The goods in question were being transported in the course of inter-State trade, where both the origin and destination were outside Andhra Pradesh (e.g., Kerala to Delhi, Karnataka to Maharashtra).

In most cases, the consignments were accompanied by valid documents such as tax invoices and e-way bills. However, the authorities intercepted the goods and initiated proceedings under Sections 129 and 130 of the GST Acts on grounds such as alleged undervaluation, mismatch in description, or discrepancy in quantity. In one case, absence of an e-way bill was alleged.

The petitioners contended that the State authorities lacked jurisdiction to initiate such proceedings in respect of inter-State supplies governed by the IGST Act and further argued that valuation issues cannot be adjudicated under Sections 129 and 130.

Issue:

Whether officers under the APGST Act have jurisdiction to detain or confiscate goods in transit under the IGST regime when the goods neither originate nor terminate within the State. Whether discrepancies relating to valuation, description, or quantity of goods can justify detention or confiscation under Sections 129 and 130 of the GST Acts.

Held That:

The Court held that the power to detain, seize, or confiscate goods under Sections 129 and 130 can be exercised only by a “proper officer” having valid jurisdiction. While cross-empowerment between Central and State authorities exists under the GST framework, such empowerment is conditional and operates only where the taxpayer is administratively assigned to the concerned authority.

It was categorically held that State GST authorities cannot exercise jurisdiction over inter-State consignments that merely pass through the State, where neither the origin nor destination lies within that State. In such cases, the State has no entitlement to tax or revenue under the IGST mechanism, and therefore, cannot invoke coercive powers like detention or confiscation.

The Court further held that issues of valuation or price discrepancy do not fall within the scope of Sections 129 and 130, unless there is clear evidence of intent to evade tax. Mere undervaluation or mismatch, without fraudulent intent, cannot justify detention or confiscation of goods.

Accordingly, the impugned proceedings in all writ petitions were quashed and set aside. The authorities were, however, permitted to forward relevant information to the jurisdictional officers of the consignor or consignee for appropriate action in accordance with law.

Case Name: Golden Traders, M/s. FM Trading, Sri P. Abdul Askar Versus The Deputy Assistant Commissioner of State Tax, The Assistant Commissioner of State Tax, Guntakal, State Of Andhra Pradesh. dated 01.04.2026

To read the complete judgement 2026 Taxo.online 789