Author: Ashwarya Sharma, Advocate & Co-Founder, RB LawCorp
Date: 10/04/2026
Introduction: When Jurisdiction Travels Beyond Borders
In a tax regime built on seamless flow and destination-based principles, jurisdiction is meant to be precise—not expansive.
Yet, a critical question continues to surface under GST enforcement:
Can an intermediary State assume jurisdiction merely because goods pass through its territory?
The Andhra Pradesh High Court, in Golden Traders & Ors. vs. Deputy Assistant Commissioner of State Tax, confronts this issue head-on—potentially marking a defining Canon moment for GST jurisprudence.
The Controversy: Transit vs Jurisdiction
The dispute arose from multiple interceptions by Andhra Pradesh GST authorities involving goods:
- Originating outside the State
- Destined for locations outside the State
- Merely transiting through Andhra Pradesh
Proceedings were initiated under Sections 129 and 130 on grounds such as:
- Alleged undervaluation
- Documentation mismatch
- Quantity discrepancies
This triggered a fundamental legal question:
Does transit through a State create jurisdiction for enforcement under GST?
Scope of the “Proper Officer”: A Statutory Construct
The Court closely examined the definition of “proper officer” under Section 2(91).
It clarified that:
- Authority flows strictly from statutory assignment
- Powers under one enactment (e.g., State GST) do not automatically extend to others (CGST/IGST)
- Cross-empowerment is not universal or automatic
Importantly, the Court rejected the notion that administrative understanding or circulars can expand statutory jurisdiction.
Cross-Empowerment: Designed Convenience, Not Unlimited Power
GST’s framework of cross-empowerment exists to:
- Avoid duplication of proceedings
- Ensure administrative efficiency
- Reduce compliance burden
However, the Court emphasized a crucial limitation:
Cross-empowerment is taxpayer-specific—not transaction-agnostic.
This means:
- Authority is linked to assigned taxpayers
- It cannot justify blanket enforcement across all transactions
Sections 129 & 130: Limits of Transit Enforcement
While officers may have general powers to intercept goods in transit, the Court drew a sharp distinction in the context of IGST:
- If a transaction neither originates nor terminates within the State
- The State has no revenue stake
Then:
It cannot assume jurisdiction to detain, seize, or penalize.
The Court questioned:
Can a State with zero tax entitlement impose penalties on such transactions?
Its answer was clear—No jurisdiction exists without fiscal nexus.
Valuation at Interception: A Misplaced Exercise
On the issue of valuation, the Court firmly held:
- Detention proceedings are not assessment proceedings
- Officers cannot conduct valuation exercises during interception
- Fishing inquiries based on portal data or third-party inputs are impermissible
This reinforces the limited and summary nature of proceedings under Sections 129 and 130.
Key Findings of the Court
The ruling crystallises the law as follows:
- Cross-empowerment applies only to assigned taxpayers
- Powers under Sections 129/130 can be exercised under CGST for intra-State matters
- IGST jurisdiction arises only where the State has a share in revenue
- No jurisdiction exists where goods merely transit through the State
- At best, the officer may inform the appropriate authority
Broader Implications: Opening a Pandora’s Box?
This judgment goes beyond transit disputes.
It raises deeper concerns about:
- Jurisdictional overreach by enforcement authorities
- Validity of actions where no revenue nexus exists
- Potential challenges even to CGST authorities in similar contexts
The ruling may:
- Trigger increased litigation
- Force re-evaluation of enforcement practices
- Demand clearer legislative guidance on jurisdiction
Conclusion: Reclaiming Jurisdictional Discipline in GST
The Andhra Pradesh High Court has reaffirmed a fundamental principle:
Jurisdiction cannot be assumed—it must be conferred by law.
By distinguishing between the power to intercept and the authority to enforce, the Court has restored structural discipline within GST.
At the same time, it exposes a critical tension:
- Efficiency of enforcement vs statutory boundaries
If GST is to truly function as a harmonised system, clarity on jurisdiction—especially in multi-State transactions—is indispensable.
In that sense, Golden Traders may well be a turning point—not just in interpretation, but in the evolution of GST enforcement jurisprudence.
📎 Attached PDF for detailed reading 👉
📎 Full Published Version: https://vilgst.com/showiframe?V1Zaa1VsQlJQVDA9=TVRnME5BPT0=&page=articles
(The author is a practicing advocate, Co-Founder and Legal Head of RB LawCorp.
He specializes in GST law. Suggestions or queries can be directed to
ashsharma@rblawcorp.in. The views expressed in this article are strictly
personal.)
