Gold In Pocket Without Appropriate Documents Sufficient For Department To Suspect Evasion Of Tax: Kerala High Court

The Kerala High Court held that if there is a presence of gold in the pocket without having proper documents, it is sufficient for the Department to suspect the evasion of tax.

The petition was filed before the Court by a proprietor of an establishment known as ‘A One Gold’ and his acquaintance.

A Single Bench of Justice Gopinath P. observed, “… 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 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.”

The Bench further said that it cannot accept the contention of the counsel for the petitioners that the petitioner’s acquaintance forgot to hand over about 100 gm of gold which was being carried in his pocket.

Advocate Tomson T. Emmanuel appeared on behalf of the petitioners while Advocate Thushara James represented the respondents.

In this case, the acquaintance of the petitioner while travelling on a train was carrying some gold ornaments at the instance of the petitioner. He was detained by the Railway Protection Force (RPF) officials and on being questioned regarding the availability of the documents for carrying the gold, he showed certain documents on his mobile phone which did not appear to be satisfactory to the RPF.

The petitioner thereafter brought certain documents which according to him were sufficient to establish that the gold was being bona fide transported with full compliance with the GST laws. The railway police however entrusted the matter to the GST department.

The High Court after hearing the contentions of the parties noted, “I am unable to find that there was any malice or ill-will or lack of jurisdiction in initiating proceedings under Section 130 of the CGST/SGST Acts. I make it clear that I have not found that Ext.P18 order is valid on its merits and it will be open to the petitioners to raise all their contentions before the appellate authority in a duly constituted appeal.”

It was further held by the Court that it will be open to the petitioners to raise all their contentions before the appellate authority and that the appellate authority shall consider the matter untrammelled by any observations contained in the judgment.

“If the petitioners file an appeal within a period of two weeks from today, the period from 11.10.2022 (date of issuance of Ext.P18 order) till today (18.01.2023) shall be excluded for the purposes of determining any period of limitation within which such appeal had to be filed”, the Court said.

Accordingly, the Court dismissed the writ petition.

Cause Title- Sasi Pathirakunnath & Anr v. Assistant State Tax Officer & Ors.

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