Allahabad High Court upheld gold confiscation, ruling GST invoices insufficient to rebut presumption under Section 123 without credible evidence.
GST Invoices Insufficient to Rebut Presumption of Illicit Import
The Allahabad High Court upheld the confiscation of 2,997 grams of gold under the Customs Act, 1962, ruling that production of GST invoices alone cannot discharge the burden imposed by Section 123. The section creates a reverse burden, requiring possessors of allegedly smuggled goods to explain acquisition through legitimate channels.
The Court held that while GST invoices may indicate a transaction, they do not, without corroborative evidence such as payment trails, import documentation, or bill of entry, establish lawful importation. The Department had established a prima facie case of evasion, and the appellant failed to produce evidence demonstrating actual customs duty payment. However, the HC commuted the penalty by 50% and released seized silver and cash, finding insufficient nexus.
This judgment underscores the limits of documentary evidence in customs proceedings. Practitioners must advise clients that mere production of commercial invoices or GST records is insufficient; a complete chain of authentic import documentation is necessary to rebut the statutory presumption under Section 123. The ruling strengthens enforcement discretion but also highlights proportionality in penalty imposition.
