2026 Supreme(AP) 1214

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
R. RAGHUNANDAN RAO, T.C.D. SEKHAR, JJ.
Golden Traders - Petitioner
Versus
The Deputy Assistant Commissioner of State Tax - Respondent
Writ Petition Nos. 541, 1756, 3097, 3225, 3227, 3252, 3254, 3258 and 3354 of 2026
Decided On : 01-04-2026

State officers under the APGST Act lack jurisdiction under Sections 129/130 of the IGST Act for inter-state goods passing through the State that originate and terminate outside the State, as no tax or penalty is due to the intermediate State. Valuation disputes are not grounds for detention under these provisions.

Headnote:(A) Constitution of India - Articles 246A, 269A, 286 - Central Goods and Services Tax Act, 2017 - Sections 6, 129, 130 - Andhra Pradesh Goods and Services Tax Act, 2017 - Sections 2(91), 6, 129, 130 - Integrated Goods and Services Tax Act, 2017 - Sections 4, 17, 129, 130 - Goods and Services Tax Rules, 2017 - Rule 138C - Circular No.01/2017 dated 20.09.2017 - Cross-empowerment of officers - Jurisdiction of State officers under IGST Act for inter-state goods in transit - Scope of Sections 129 and 130 - Valuation disputes not a ground for detention or seizure.

(B) Cross-empowerment under Section 6 of CGST Act and Section 4 of IGST Act requires notification and administrative allocation of taxpayer; a State officer is not automatically empowered to act under CGST or IGST unless the taxpayer has been allotted to the State and the officer is assigned as proper officer. (Paras 9-23, 36-37)

(C) A State officer under Section 129/130 of APGST Act cannot exercise powers under the IGST Act in respect of inter-state supplies that originate and terminate outside the State, as no part of the tax or penalty is due to the intermediate State. (Paras 27-29, 37)

(D) Questions of undervaluation or mismatch in description or quantity of goods do not justify detention, seizure or confiscation under Sections 129 or 130; such issues must be referred to the assessing authority. (Paras 30-33) Cases referred: TVL Vardhan Infrastructure v. Special Secretary, 2024 (16) CENTAX 509 (MAD); Alfa Group v. Assistant State Tax Officer, 2020 (34) G.S.T.L. 142 (Ker.); K.P. Sugandh Ltd. v. State of Chhattisgarh, 2020 (38) GSTL 317 (Chh.); Panchi Traders v. State of Gujarat, 2025 (12) TMI 941; Shambhu Saran Agarwal & Co. v. Additional Commissioner Grade, 2024 (84) GSTL 181 (All.); Armour Security (India) Ltd. v. Commr. (CGST), 2025 SCC OnLine SC 1700.

Facts of the case:
Multiple writ petitions were filed challenging orders under Form GST MOV-11 or DRC-07 detaining, seizing or confiscating goods and conveyances in transit. The consignments originated from outside Andhra Pradesh (e.g., Kerala) and were destined for other States, passing through Andhra Pradesh. The goods were accompanied by documents under Section 68 of the GST Act, except in one case. The authorities initiated proceedings under Section 129 or 130 on grounds of gross undervaluation, mismatch in description or quantity.

Findings of Court:
The High Court held that the State officers lacked jurisdiction to proceed under the IGST Act for goods moving in inter-state trade from outside the State to outside the State. Even if cross-empowered, the State cannot appropriate penalties or fines from such transactions. Furthermore, valuation disputes do not fall within the scope of Sections 129 or 130, which are meant for contraventions like absence of documents or forged papers. The proper officer can only detain or seize in cases of blatant evasion with intent to evade tax.

Issues: (1) Whether officers appointed under the APGST Act have jurisdiction under Section 129/130 of the IGST Act in respect of inter-state supplies that originate and terminate outside Andhra Pradesh? (2) Whether valuation discrepancies can be a ground for detention or seizure under Section 129/130? (3) Whether cross-empowerment under Section 6 of CGST Act and Section 4 of IGST Act is automatic or requires notification? (4) Whether the driver's refusal to provide details in W.P.No.3258/2026 justified detention when no prior inspection report was recorded?

Ratio Decidendi: The court ruled that cross-empowerment is not automatic; it requires administrative allocation of the taxpayer and issuance of a notification. For IGST, a State officer can only act if the State is entitled to a share of the tax under Section 17 of the IGST Act. In cases of goods in transit from outside the State to outside the State, the intermediate State has no entitlement and no jurisdiction under Section 129/130. Valuation issues cannot be adjudicated under these provisions; they must be referred to the proper assessing officer. The absence of e-way bills may justify detention, but the requirement of recording inspection online under Rule 138C must be followed.

Result: All writ petitions are allowed. The impugned proceedings under Section 129 or 130 are set aside. The respondents are at liberty to forward the records and samples to the respective proper officers of the petitioners for further action. No order as to costs.

ORDER :

R. Raghunandan Rao, J.

As all these Writ Petitions raise a similar question of law, they are being disposed of, by way of this common order.

2. Heard Sri P. Girish Kumar, Sri V. Raghuraman, Sri M.V.J.K. Kumar, Sri Pasupuleti Venkata Prasad, learned counsel for the petitioner and Sri Sameer Gupta, learned counsel appearing on behalf of Sri Akula Vamsi Krishna, learned counsel for the petitioner and Sri R. Kalyan Chakravarthy, learned Government Pleader for Commercial Taxes appearing for the respondents.

3. In all these cases, the officers, appointed under the APGST Act, at various check posts, in the State of Andhra Pradesh, had intercepted consignments, moving in the course of interstate trade from a point of origin, which is outside the State of Andhra Pradesh, to a destination, which is also outside the State of Andhra Pradesh. After such interception, proceedings have been initiated, initially under Section 129 of the GST Act and in some cases, these proceedings were continued under Section 130 of the GST Act.

4. The details of point of origin of the goods, the destination of goods, the dates on which these consignments were intercepted and detained/seized/confiscated and the details relating to the provisions of the GST Act which were invoked are contained in the table set out below:

5. In all these cases, it is an admitted fact, that 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. However, the goods were intercepted and proceedings, under Section 129 or 130 of the GST Act, were initiated and continued, on the ground that the goods were grossly undervalued or on the ground that the goods do not match the description set out in the accompanying documents, or on the ground that the quantum of goods intercepted, was far higher than the quantum set out in the accompanying documents.

6. The contentions raised by the petitioners, in all the aforesaid cases are primarily twofold. Firstly, the State authorities in the State of Andhra Pradesh, have no jurisdiction, to initiate proceedings under Section 129 or section 130, in relation to movement of goods under the IGST Act and secondly, the question of valuation etc., cannot be taken up under Section 129 or 130

7. The first issue that comes up before this Court is whether the officers appointed under the APGST act, can exercise any power under Section 129 or 130 of the APGST Act or CGST Act for intercepting, detaining or confiscating goods, whose movement, falls under the ambit of the IGST Act.

8. Section 129 deals with detention/seizure and release of goods and conveyances in transit. The officer who can detain or seize goods, under this provision is an officer designated and authorized as a "proper officer". Section 130 deals with confiscation of goods or conveyances and levy of penalty. Section 130(2) r/w Section 130(6) and 130(7) makes it clear that the officer who can pass an order of confiscation of goods or conveyances and also levy of penalty is only the "proper officer". The term "proper officer" is defined, in Section 2(91), of the APGST Act, in the following terms:

"Section 2. Definitions:-

(91) "proper officer" in relation to any function to be performed under this Act, means the Chief Commissioner or the officer of the State tax who is assigned that function by the Chief Commissioner;"

9. Any officer, assigned a function by the Chief Commissioner, would be a proper officer in relation to such function. This would also mean that a proper officer, assigned by the Chief Commissioner, under the APGST Act, would have jurisdiction to perform the function, assigned to him, only in terms of the APGST Act. Assignment of function, by the Chief Commissioner, under the APGST Act, would not empower such an officer to act under either the CGST Act or under the IGST Act. However, section 6 of the CGST Act, as well as Section 4 of the IGST Act, provides for cross empowerment to an officer appoint

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