Case Details: Korfex Industries Pvt. Ltd. vs. State of Rajasthan (2025) 37 Centax 195 (Raj.)
Judiciary and Counsel Details
- Sanjeev Prakash Sharma, ACTG. CJ. & Sanjeet Purohit, J.
- Ms Urvashi Dugga, Adv. & Shri H.V. Nandwana, for the Petitioner.
- S/Shri Bharat Vyas, AAG (Sr. Av.), Siddhant Jain, Jaivardhan Joshi & Rakesh Choudhary, Sr. CGPC, for the Respondent.
Facts of the Case
The petitioner filed a writ petition seeking quashing of detention orders and release of goods and vehicle, contending that the procedure prescribed for the movement of goods had been duly followed. It was submitted that the e-way bill and tax invoice were generated for transit, that the vehicle was GPS-enabled, and that it had already reached its destination when the authorities issued detention in Form MOV-02. The petitioner alleged procedural lapses in interception and seizure and asserted that the action of the authorities was not in accordance with the law. During search and seizure proceedings, the department relied upon statements and material indicating that goods were loaded at Nangloi, Delhi, after being collected from unknown persons through tempos, pickups, and other vehicles, and alleged collusion, fabrication of transactions, and availing of fake input tax credit through bogus entities. The matter was accordingly placed before the High Court.
High Court Held
The Rajasthan High Court held that, notwithstanding the plea of procedural infirmities, the material on record prima facie established a systematic scheme devised to defraud the public exchequer. Interpreting section 67 read with sections 129 and 130 of the CGST and the Rajasthan GST Act, the Court held that substantive action was justified where investigation revealed collusion, bogus entities, and fabricated transactions aimed at tax evasion. Applying the law to the facts, the Court noted that the statements and circumstances showed the illegal collection of goods from unknown persons, the generation of fictitious outward liability through entities with empty credit ledgers, and the availing of fake credit by exploiting systemic gaps in the GST framework. The Court further held that equitable jurisdiction under Article 226 cannot be invoked by persons with antecedent inequitable conduct or misuse of the GST system, and accordingly dismissed the writ petition with costs.
List of Cases Cited
- Tomorrowland Ltd. v. Housing & Urban Development Corporation Ltd. — (2025) 4 SCC 19 — Referred [Para 25]
